Oil Soars Nearly 7% on Israel-Iran Strikes, Stirring Middle East Supply Worries

With tensions escalating and concerns mounting over a broader war in the Middle East, oil prices surged nearly 7% on Friday after Israel carried out airstrikes on Iranian military targets.

Brent crude went up by $4.57 to settle at $73.93 a barrel, to close at $72.57. Earlier in the day, the benchmarks surged to the highest levels since January. These sharp rises repeat spikes that occurred during previous international conflicts.

Brent crude futures, the international benchmark, spiked by $4.94, or 7.1%, to trade at $74.30 a barrel by 1442 GMT. The contract touched an intraday high of $78.50 earlier in the session—a level last seen on January 27.

Meanwhile, U.S. West Texas Intermediate (WTI) crude climbed $4.72, or 6.9%, reaching $72.75 a barrel. It too hit a session peak at $77.62, the highest since January 21.

The sharp rise represents the biggest daily leap for both benchmarks since the onset of the Russia-Ukraine conflict in 2022, which had sent shockwaves through the global energy markets.

Geopolitical Tensions

Iran, which was the target, promised strong retaliation, raising fears about the security of critical oil supply routes. One critical area of concern continues to be the Strait of Hormuz, where nearly 20% of the world's oil is carried, transiting between the Persian Gulf and the Gulf of Oman.

Since Iran's oil refining and storage infrastructure remained operational, it helped ease some short-term panic. However, analysts warn that any direct attack on oil facilities or disruption of shipping lanes could drive prices even higher.

The geopolitical shock has added a temporary premium to oil prices, market analysts said. While energy installations have not been directly affected in the Israeli attack, any attempt by Iran to draw other countries into the conflict could escalate the crisis. Traders and energy companies are now closely monitoring developments on the ground.