Oil prices spiked on Friday, June 13, by 8.8% after Israel launched strikes on Iran, escalating tensions in the Middle East and raising concerns over potential oil supply disruptions.
Oil prices hit their highest point since January, according to data from Bloomberg Terminal at 1:42 p.m. Kyiv time.
Brent crude futures jumped more than 8%, rising to $75.21 per barrel, the data showed. Brent price was at the same level in January this year.
US crude West Texas Intermediate (WTI) surged to $73.91.
The jump marked the biggest single-day move for both benchmarks since the beginning of Russiaʼs full-scale invasion of Ukraine in 2022, according to the data from Bloomberg Terminal.
However, there’s still room for a price increase. Brent crude futures reached $83 per barrel in June 2022, five months after Russia started its full-scale invasion of Ukraine. WTI futures reached $78.48 back then, according to Bloomberg Terminal.
On Friday, Israel’s strike damaged parts of Iran’s nuclear facility in Natanz. According to Iran’s Atomic Energy Organization, radioactive or chemical contamination has been reported outside the site, Reuters wrote.
The International Atomic Energy Agency (IAEA) also confirmed on platform X the Israeli strike on the uranium enrichment plant in Natanz.
“The Agency is in contact with Iranian authorities regarding radiation levels. We are also in contact with our inspectors in the country”, the IAEA said.
Israel said it hit Iranian nuclear facilities, missile sites, military leaders, and nuclear scientists. It described the attack as the start of a longer campaign to block Iran from building a nuclear weapon.
Iran’s Supreme Leader, Ayatollah Ali Khamenei, vowed “harsh punishment.” He said the strike killed several military commanders.
Oil analysts and traders are watching for Iran’s response, Reuters wrote. A key concern is whether Iran will retaliate only against Israel or widen the conflict.
Traders in Singapore said the strike has not yet affected oil shipments. But they warned that closure of the Strait of Hormuz could change that. Around 20% of global oil flows through the strait – nearly 19 million barrels per day.
However, shipping companies have already reacted to the attack. Two maritime security firms warned vessels to avoid waters near Israel, Iran, Syria, Egypt, Cyprus, and the Suez Canal, Bloomberg reported.
They advised crews to run emergency drills, stay in contact with authorities, and change routes if connected to Israeli interests, due to the risk of Iranian retaliation.
Prices might surge more if the attacks impact oil flow through the Strait of Hormuz, the Suez Canal and Bab-el-Mandeb strait, Bloomberg wrote.
Barclays analyst Amarpreet Singh said oil markets are alarmed, but fundamentals remain unchanged. The price surge hasn’t reflected any drop in Iranian production so far, Reuters wrote.
Secretary of State Marco Rubio called the strike a “unilateral action” and said Washington was not involved. He urged Iran not to target US interests or personnel in the region.