Oil prices surged on Friday, ending the session up 7%, as escalating airstrikes between Israel and Iran sparked fears of a broader disruption to Middle Eastern oil supplies.
Brent crude futures closed at $74.23 per barrel, rising $4.87 or 7.02%, after briefly soaring more than 13% to $78.50—the highest since January 27. U.S. West Texas Intermediate (WTI) crude settled at $72.98, up $4.94 or 7.62%, having touched an intraday peak of $77.62, its strongest level since January 21.
Both crude benchmarks posted their biggest single-day price swings since 2022, when Russia’s invasion of Ukraine roiled global energy markets.
The spike came after Israel launched coordinated strikes on Iranian nuclear sites, missile production facilities, and military leadership targets, signaling the beginning of a long-term campaign to stop Iran from acquiring nuclear weapons. Iran responded with threats of severe retaliation.
Shortly after markets closed, reports emerged that Iranian missiles had struck buildings in Tel Aviv, while explosions were heard in southern Israel.
U.S. President Donald Trump urged Iran to agree to a nuclear deal to prevent “already planned” future attacks.
Iran’s National Oil Refining and Distribution Company stated that its refineries and storage operations remained intact and continued functioning normally.
Iran, a key OPEC member, produces about 3.3 million barrels per day (bpd) and exports over 2 million bpd in crude and refined products. Analysts noted that OPEC and its allies, including Russia, have limited spare capacity—roughly equal to Iran’s output—to offset any significant disruption.
The conflict has renewed focus on the vulnerability of the Strait of Hormuz, a crucial maritime chokepoint.
“Saudi Arabia, Kuwait, Iraq, and Iran all rely on this narrow waterway for oil exports,” Rabobank noted. Roughly 18 to 19 million bpd—about 20% of global oil consumption—flows through the strait daily.
Ben Hoff, head of commodity research at Societe Generale, pointed out that Israeli attacks have so far avoided Iran’s key oil infrastructure, such as Kharg Island, which handles around 90% of Iran’s crude exports.
“This opens the possibility of an ‘energy-for-energy’ escalation, where damage to one country’s oil infrastructure could lead to retaliatory strikes on the other’s,” Hoff warned.
Analysts at JPMorgan also cautioned that Iran could suffer significant economic consequences if the Strait of Hormuz were blocked, given its heavy reliance on maritime oil exports. Any such move would also strain its relationship with China, its main oil buyer.
Elsewhere in global markets, equities plunged while traditional safe-haven assets like gold, the U.S. dollar, and the Swiss franc saw a surge in demand.
