Global oil markets roared to life on Friday, as crude prices soared past 8%, following Iran massive retaliatory missile strike on Israel. The sharp spike rattled already-fragile energy markets, highlighting how war has consistently driven oil volatility from 2015 to 2025.
At the close of trading:
- Brent Crude surged to $74.23 (+7.02%)
- WTI Crude jumped to $72.98 (+7.26%)
- Murban Crude climbed to $73.52 (+6.17%)
- Natural Gas rose to $3.581 (+2.55%)
Iran Strikes Back, Markets React Instantly
Just hours after Israel’s preemptive assault Operation Rising Lion hit over 100 strategic Iranian sites, Tehran launched more than 150 ballistic missiles in a two-wave attack across Israel.
As expected, oil markets reacted swiftly. Brent crude briefly peaked at a 13% intraday gain. According to the Jerusalem Post, Israeli defence systems intercepted many projectiles, yet at least 40 people were injured, two critically.
Israeli Defence Minister Yoav Gallant condemned the attack, stating Iran had crossed a red line by striking civilian targets, and promised a forceful response.
Geopolitical Shock Sends Oil Risk Premium Soaring
Meanwhile, traders began pricing in a potential disruption to oil flows, especially via the Strait of Hormuz, the narrow waterway responsible for nearly 20% of the world’s oil shipments. Although Iran’s refineries and terminals like Kharg Island and Abadan remain untouched, fear alone has triggered price volatility.
RBC Capital’s Helima Croft explained that even a marginal threat to Hormuz can jolt the market, despite the strong presence of U.S. naval forces in the region.
Analysts Raise Forecasts, Brace for Escalation
Goldman Sachs analyst Daan Struyven warned the conflict could temporarily cut up to 1.75 million bpd of Iranian supply, pushing Brent above $90. He, however, expects a gradual return to $60–$70 per barrel by 2026 as supply chains recover.
So far, Israel has avoided striking Iran’s oil facilities, but that could change. Analysts believe Tehran may retaliate through cyberattacks, proxy strikes, or direct assaults on Gulf infrastructure.
Market Remains on Edge Despite OPEC+ Cushion
Despite the spike, some experts remain sceptical about how long the rally will last. Spare capacity from OPEC+ heavyweights like Saudi Arabia and the UAE, combined with a potential boost in U.S. shale output, could soften the impact of a short-term supply shock.
For now, traders are watching the weekend closely, bracing for another wave of escalation.
