Global oil prices experienced a sharp surge today, Friday, June 13, 2025, following reports of an Israeli strike on Iran, marking a dramatic escalation of geopolitical tensions in the Middle East. The news immediately sent shockwaves through energy markets, triggering concerns about potential disruptions to vital global supply lines.
The benchmark Brent Crude saw its price jump by more than 10% shortly after the news broke, reaching its highest level since January. Similarly, US Nymex oil prices also saw a significant increase. This rapid ascent reflects deep-seated anxieties among traders that a broadening conflict between two key regional powers – Iran and Israel – could severely impact oil supplies originating from the energy-rich Middle East.
The ripple effect of crude oil prices is extensive, influencing costs across numerous sectors, from the direct impact on fuel prices at the pump for motorists to the indirect effect on food prices at supermarkets due to increased transportation and production costs.
As trading commenced in Europe, oil prices had eased slightly from their initial peaks but remained significantly elevated, settling around 5% higher than Thursday’s closing prices. London-traded Brent crude was priced at $72.80 a barrel, while oil traded on the US’s Nymex stood at $73.20 a barrel. While these prices are notably below the peaks seen in 2022 following Russia’s invasion of Ukraine, the sudden surge highlights the market’s sensitivity to geopolitical instability in the Middle East.
Beyond oil, global financial markets also reacted with apprehension. Share prices fell across both Asian and European markets on Friday. The UK’s FTSE 100 index, for instance, opened down by 0.6%. Conversely, traditional “safe haven” assets, typically sought out by investors during periods of uncertainty, saw gains. Gold, often considered the ultimate safe haven, hit its highest level in nearly two months, rising 1.2% to $3,423.30 an ounce. The Swiss franc also strengthened, as investors sought more reliable investments amidst the heightened volatility.
The Israeli Defence Forces (IDF) confirmed that following their strike, Iran had launched approximately 100 drones towards Israel, indicating a retaliatory response and underscoring the reciprocal nature of the escalating conflict.
Energy analysts are now closely monitoring how the conflict might worsen in the coming days. Vandana Hari of Vanda Insights commented to the BBC, “It’s an explosive situation, albeit one that could be defused quickly as we saw in April and October last year, when Israel and Iran struck each other directly.” However, she cautioned, “It could also spiral out into a bigger war that disrupts Mideast oil supply.”
The most extreme scenario for global oil supplies involves Iran potentially targeting crucial energy infrastructure or shipping routes in the Strait of Hormuz. This narrow waterway, bounded to the north by Iran and to the south by Oman and the United Arab Emirates (UAE), connects the Gulf with the Arabian Sea and is one of the world’s most strategically vital shipping lanes. Approximately one-fifth of the world’s total oil consumption, roughly 18-20 million barrels per day, passes through this strait. Any significant disruption here could remove millions of barrels of oil per day from global markets, triggering a severe supply shock and further price spikes. At any given time, dozens of tankers traverse this strait, transporting vast quantities of oil and gas from major Middle Eastern producers to their global customers.
Saul Kavonic, head of energy research at MST Financial, noted the immediate market reaction: “What we see now is very initial risk-on reaction.” He emphasized that “over the next day or two, the market will need to factor in where this could escalate to,” indicating a period of heightened uncertainty and volatility as market participants assess the potential trajectory of the conflict. The global economy, already grappling with existing inflationary pressures, now faces the added threat of significantly higher energy costs, which could impact everything from transportation to manufacturing and food prices worldwide.
Source: http://thepressradio.com
