Oil prices have seen a significant surge of nearly 9% in their prices after Israel launched a series of airstrikes in Iran. The airstrikes were a decisive move on the part of Israel to stop Iran from becoming a nuclear power.
The Israeli Military confirmed its operation via its official telegram channel, stating that ‘dozens of fighter jets targeted Iranian nuclear complexes in various parts of the country.”
The strikes fueled an immediate reaction in the global market as the oil, bonds and gold prices swiftly increased. Brent crude increased by more than 7% during early Friday trading, the highest since January 7.
Many investors have taken future supply disruptions into the picture as the Middle East region is responsible for about one-third of global oil supply. The sudden momentum in the geopolitical conflict has made investors move into safe haven assets.
Israel attacked several crucial nuclear facilities as part of the ‘Operation Rising Lion’. Some of the top military officials and nuclear scientists were assassinated during this operation. Initial wave of attacks came on Friday morning. A second attack on the city of Tabriz was reported by the local media. The Rising Lion operation was responsible for destruction in areas of the capital Tehran, Natanz, Tabriz, Isfahan, Arak and Kermanshah. Military sites, a main uranium enrichment facility, a nuclear research center and two military bases were some of the structures that were attacked by Israel.
Iranian media reported that the Israeli attacks resulted in deaths of Hossien Salami, the commander-in-chief of the Islamic Revolutionary Guard Corps and Mohammad Bagheri, who was the chief of staff of Iran’s military.
Following the attack, Israeli Prime Minister Benjamin Netanyahu has released his official statement - “Moments ago, Israel launched Operation ‘Rising Lion’, a targeted military operation to roll back the Iranian threat to Israel’s very survival. The operation will continue for as many days as it takes to remove this threat. For decades, the tyrants of Tehran have brazely, openly called for Israel’s destruction.
A fifth of the world’s total oil consumption passes through the Strait of Hormuz. The primary concern was whether the geopolitical conflicts would affect the oil flow in the region and if the waterway would be at the risk of impact. JPMorgan Analysts shared that closing the strait or a retaliatory response exchange between both the countries could lead to oil price surging. This implies oil prices surging to double the amount per barrel.
Source: BBC, Al jazeera and Oilprice.com