Publication date:
June 13, 2025
Oil Prices Surge Following Israeli Strike on Iran
Oil prices have risen sharply due to fears of supply disruptions after Israel launched strikes against Iran.
Geopolitics
Oil prices experienced a significant surge on Friday following Israel's military strikes against Iran the previous day, raising concerns about potential disruptions to energy supplies from the Middle East. US oil prices jumped over 7%, while Brent crude settled around 5% higher by late Friday.
The price spikes were some of the largest seen in recent years for oil benchmarks, comparable to increases in March 2022 after Russia's invasion of Ukraine. Both major oil benchmarks posted their biggest weekly gains since October 2022.
Analysts warn that further escalation between Israel and Iran could have major impacts on global energy markets. The Strait of Hormuz, a key shipping route that Iran has threatened to close, is particularly critical - nearly one-third of global seaborne oil passes through this strait. Any disruption there would likely cause severe tightening of oil and liquefied natural gas supplies.
The sharp rise in oil prices comes after a period of relatively calm markets due to ample supply and slow demand growth. Sustained higher energy costs could push up inflation and fuel prices at a time of heightened economic uncertainty.
Stock markets reacted negatively to the increased geopolitical tensions, with major US and European indices closing lower on Friday. Meanwhile, traditional safe haven assets like gold and US Treasuries saw increased demand.
The situation remains fluid, with markets on high alert for any signs of further escalation that could impact global energy supplies and prices. Analysts expect continued volatility in oil markets as events unfold in the coming days and weeks.
The price spikes were some of the largest seen in recent years for oil benchmarks, comparable to increases in March 2022 after Russia's invasion of Ukraine. Both major oil benchmarks posted their biggest weekly gains since October 2022.
Analysts warn that further escalation between Israel and Iran could have major impacts on global energy markets. The Strait of Hormuz, a key shipping route that Iran has threatened to close, is particularly critical - nearly one-third of global seaborne oil passes through this strait. Any disruption there would likely cause severe tightening of oil and liquefied natural gas supplies.
The sharp rise in oil prices comes after a period of relatively calm markets due to ample supply and slow demand growth. Sustained higher energy costs could push up inflation and fuel prices at a time of heightened economic uncertainty.
Stock markets reacted negatively to the increased geopolitical tensions, with major US and European indices closing lower on Friday. Meanwhile, traditional safe haven assets like gold and US Treasuries saw increased demand.
The situation remains fluid, with markets on high alert for any signs of further escalation that could impact global energy supplies and prices. Analysts expect continued volatility in oil markets as events unfold in the coming days and weeks.
