NEW DELHI: Crude oil prices soared by more than 12% on Friday following an escalation in tensions between Israel and Iran. Israel launched a series of coordinated airstrikes on Iranian nuclear facilities, triggering fears of broader disruptions to global oil supplies. As a result, Brent Crude prices surged nearly 13%, reaching $77.77 per barrel, while West Texas Intermediate (WTI), the benchmark US oil contract, climbed 12.6% to $76.61 per barrel.
However, by 11:10 AM IST, the rally had cooled somewhat, with Brent Crude trading at $74.86 per barrel and WTI at $73.73. The spike in crude prices was driven by concerns that the ongoing conflict between Israel and Iran could disrupt oil supplies from the energy-rich region, which accounts for roughly one-third of the world’s oil production. Oil prices are now on track for their largest weekly gain since 2022.
A report from JPMorgan warned that an escalation in the conflict could push oil prices to as high as $120 per barrel, potentially driving the US Consumer Price Index (CPI) to 5%. However, the report also noted that the closure of the Strait of Hormuz, a key global oil shipping route, is considered a low-risk event, as Iran would damage its own economic and political position by antagonizing its main oil customer.
According to brokerage firm ICICI Securities, crude oil prices have risen amid growing geopolitical tensions in the Middle East. The escalating situation between Israel and Iran could affect oil supplies, further adding to the uncertainty in global energy markets. In addition, the US is preparing a partial evacuation of personnel from the region after Iran threatened to target US military bases if nuclear talks fail.