Oil prices surged by as much as 13% on Friday after Israel launched a series of airstrikes on Iran, sparking fears of a broader regional war that could disrupt global energy supplies.
Brent crude briefly rose above $78 per barrel, marking the biggest one-day gain since March 2022 during Russia’s invasion of Ukraine. It later settled around $74.95 as traders assessed the scale of the threat.
The attack targeted Iran’s nuclear and missile sites, including facilities near Natanz and Tabriz. In retaliation, Iran launched more than 100 drones toward Israel, according to Israeli defense officials. Military sources warn that further missile strikes are expected in the coming days.
The rising conflict is fueling speculation about future oil supply disruptions, particularly through the Strait of Hormuz, a critical passage for about one-third of global crude oil shipments.
Shipping concerns are also rising. Freight agreements for oil cargoes from the Gulf to Asia jumped 15%, and tanker operators are increasingly hesitant to send vessels through the area. Analysts expect higher shipping rates and insurance premiums if hostilities continue.
The price of gold moved closer to record highs as investors rushed to safer assets. Meanwhile, European natural gas prices also rallied on fears of broader supply impacts.
U.S. President Donald Trump, in a statement on Truth Social, urged Iran to “make a deal before it is too late,” warning of further military action.
Market analysts, including those at SEB and JPMorgan, noted that while current oil prices reflect elevated risk, they do not yet fully price in a complete supply disruption. JPMorgan warned oil could hit $130 per barrel in a worst-case scenario involving a prolonged blockade of the Strait of Hormuz.
Some OPEC+ members, including Saudi Arabia, may respond with output increases to stabilize the market. The International Energy Agency also said it is prepared to release emergency stockpiles if required.
With global tensions rising, traders are bracing for a volatile period ahead. Financial markets will be closely watching how Israel and Iran proceed and whether the conflict pulls in other regional powers.
