Oil Price Soars Following Israeli Airstrikes on Iran's Nuclear and Ballistic Sites
The price of oil skyrocketed this morning following last night's Israeli airstrikes on the country's nuclear and ballistic programs. Brent futures contracts immediately surged by over 9%, exceeding the $75 per barrel threshold. This marks the highest daily gains for black gold since the COVID-19 pandemic.
The main enrichment site at Natanz and top Iranian nuclear scientists were targeted. Hossein Salami, commander-in-chief of Iran's Revolutionary Guard, and Mohamed Bagheri, the chief of staff, were killed. The operation is expected to continue for days.
Markets now fear that Iran will retaliate by targeting Israeli or American interests, resulting in a major military conflict and potential oil supply disruptions. Tehran is well aware that Donald Trump is focused on reducing energy costs. It will do everything to ensure its actions impact Middle Eastern oil supplies, increasing gasoline and diesel prices for Americans, which is politically damaging for the White House.
It's clear that oil markets have largely underestimated geopolitical risks. Recent developments show that these risks are tangible, explaining the rapid price surge. The Israeli attacks will lead to some form of retaliation, which could easily spiral out of control.
US Secretary of State Marco Rubio has clearly indicated that these airstrikes are a unilateral measure by Tel Aviv against Iran without US support. He has also warned Iran against targeting American forces in the region. In practical terms, this is the key element for the price cursor.
