Israel-Iran conflict: Crude oil prices jump 7% on supply worries as Middle East tensions escalate
Crude oil prices jumped over 7% on Friday as Israel - Iran conflict raised worries of a wider disruption in oil exports from the Middle East.
Brent crude oil futures gained $4.87, or 7.02%, to settle at $74.23 a barrel after earlier soaring over 13% to an intraday high of $78.50, the strongest level since January 27. For the week, Brent oil prices rallied 12.5%.
US West Texas Intermediate crude ended $4.94, or 7.26%, higher at $72.98 a barrel. During the session, WTI oil jumped over 14% to $77.62, its highest since January 21. WTI climbed 13% to its level a week ago.
Both benchmarks recorded their largest intraday moves since 2022, when Russia's invasion of Ukraine triggered a spike in energy prices.
Israel said it had targeted Iran's nuclear facilities, ballistic missile factories, and key military commanders, marking the beginning of what it described as a sustained operation aimed at preventing Tehran from developing nuclear weapons. Shortly after markets closed, Iranian missiles struck buildings in Tel Aviv, while explosions were also reported in southern Israel.
Iran's National Iranian Oil Refining and Distribution Company said that oil refining and storage facilities remained intact and fully operational, Reuters reported.
Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), produces approximately 3.3 million barrels per day (bpd) and exports over 2 million bpd of crude oil and fuel.
Analysts and OPEC watchers estimate that spare production capacity among OPEC and its allies, including Russia, is roughly equal to Iran's output and could help offset any potential supply disruptions, according to Reuters.
The escalating conflict has also heightened concerns over potential disruptions to the Strait of Hormuz, a critical chokepoint for global oil shipments.
(With inputs from Reuters)
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