Global oil prices spiked on Thursday following reports that Israel launched airstrikes on Iran’s nuclear facilities in Natanz and Arak late Wednesday night.
According to Reuters, the sudden price jump was triggered by fears of a broader conflict erupting in the Middle East and potential disruption in oil supply chains. Investors reacted swiftly, bracing for geopolitical instability.
Market Response:
Brent Crude Futures rose by 88 cents, or 1.15%, bringing the price to $77.58 per barrel. This followed an already volatile session the previous day, when oil prices initially dropped by as much as 2.7% due to Iran-Israel tensions, before rebounding 0.3%.
Tony Sycamore, a market analyst at IG, said:
“Until there is clarity on whether the U.S. will intervene militarily or push for diplomatic talks, oil prices will carry a risk premium.”
Goldman Sachs echoed this sentiment, suggesting that ongoing tensions could add a geopolitical premium of up to $10 per barrel. They even projected Brent Crude potentially crossing the $90 mark if conflict escalates or Iranian oil supply is reduced.
Meanwhile, former U.S. President Donald Trump stated that he has not yet decided whether the U.S. will support Israel militarily, further adding to market uncertainty.
Priyanka Sachdeva, an analyst at Phillip Nova, added:
“The uncertainty surrounding Trump’s foreign policy stance has left markets jittery. Everyone is waiting for a clear signal that could influence oil supply and regional stability.”
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