Oil prices soar following Israel strikes on Iran, as AMP's chief economist warns of further flow-on effects for Australians

Sky News AU

18 hours ago

Global oil prices have spiked as tensions continue to escalate in the Middle East in the wake of Israel launching multiple strikes on Iran, and AMP's chief economist Shane Oliver has warned Australians could see costs rise at the petrol pump.
Multiple Iranian targets were hit about 4am local time on Friday morning after "pre-emptive" strikes were launched by Israel, according to the IDF, and 100 drones have now been fired towards Israel by Iran.
Oil prices around the world have soared as the situation continues to unfold, with Mr Oliver in his weekly market update on Friday saying that oil prices, which had already been on the rise in June, have further increased following the strikes by Israel.
He said Australian petrol prices could be up by 12 cents per litre since the start of this month if oil prices continue to rise as they are.
"What happens in the very near term will depend on how Iran retaliates," Mr Oliver said in his update.
He said the "main risk" to prices would be if Iran chose to hit United States bases or other oil producing countries in the Middle East and disrupts trade through the Strait of Hormuz, which he said about a fifth of global oil consumption and a quarter of LNG supply is shipped through daily.
"Central banks including the RBA will likely look through any near-term boost to inflation from higher petrol prices," the economist said.
"And don't forget that oil prices have just gone back to where they were a year ago. Beyond the near term, the key will be if Iran returns to the nuclear talks with the US."'
The developments between Iran and Israel will likely result in a "renewed period of uncertainty" for shareholders due to more potential hikes in oil prices, he said.
Explosions in the Iranian capital were heard on Friday morning according to Iranian state media, and Israel has claimed to have 'eliminated' the chief of Iran's military, Mohammad Bagheri.
The IDF has called the move to strike dozens of military targets "pre-emptive", and Iran's Supreme leader Ayatollah Ali Khamenei stated Israel had 'prepared a bitter fate for itself'.