Oil prices climb amid Israel-Iran tensions, as escalating attacks push the conflict into a dangerous new phase.
Israel’s strike on Iran’s South Pars gas field triggered a fire and halted production, raising alarm across energy markets already on edge.
Oil Surges As Israel-Iran Conflict Fuels Supply Fears
With the Strait of Hormuz — a chokepoint for a fifth of the world’s oil — in focus, traders are bracing for wider disruption in a region critical to global supply.
South Pars Strike Sparks Concerns
Following an Israeli strike on Iran’s South Pars gas field, a fire erupted and forced operators to halt production at one platform.
Although Iran uses most of its gas domestically, the field also produces condensate, which it exports.
However, the main concern shifted to the Strait of Hormuz—a key chokepoint that handles roughly 20% of global oil shipments.
Analysts See Limited Upside
Despite the volatility, analysts tempered expectations.
Robert Rennie of Westpac said, “Unless Iran blocks the Strait or Houthis target shipping, Brent won’t rise significantly. We expect it to stay below $80.”
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Markets React To Rising Tension
As the situation escalated, financial markets responded swiftly.
Oil jumped over 13% on Friday, and investors moved their money into safe havens like gold.
In response to Israel’s strikes, Iran cancelled planned nuclear talks with the US in Oman.
Strait Closure Unlikely
Meanwhile, Iran has kept its core oil export infrastructure untouched.
Because China buys most of its oil, Tehran would undermine its own revenues by blocking the Strait.
Muyu Xu of Kpler emphasised, “From both an economic and political perspective, closing the Strait makes no sense.”
Market Signals Point To Risk
Market indicators reflected rising tension.
The Brent December spread widened to $3.48, while traders rushed to bullish options as volumes and volatility surged.
Thus, fears of prolonged disruption in the Middle East continue to drive oil’s rally.