As the sun sets on a tense weekend in the Middle East, following coordinated U.S. and Israeli strikes on Iran, traders anticipate a sharp rise in oil prices when trading resumes, pricing in the risk of a wider regional conflict.
While immediate supply remains stable, the threat of retaliation—and the possibility of disruptions in the Strait of Hormuz—has reintroduced a geopolitical premium that could shape the market in the days ahead.
Over the weekend, President Trump declared he had “obliterated” Iran’s main facilities, following coordinated attacks with Israel.
In response, Iran, OPEC’s third-largest crude producer, vowed to retaliate.
As a result, geopolitical head at Rystad and former OPEC official, Jorge Leon, stated, “Markets will factor in a higher geopolitical risk premium, even without immediate retaliation.”
Price Forecasts Signal Sharp Gains
Brent crude, which ended Friday at $77.01, may rise sharply.
Similarly, WTI could gain as traders react to the developments.
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SEB and Saxo Bank analysts predicted a $3–5 increase at the open, especially as investors begin unwinding long positions.
Earlier last week, despite fresh US sanctions on Iran, oil prices dipped slightly.
However, since June 13, when Israel targeted Iranian nuclear facilities and Iran responded by hitting Tel Aviv—Brent climbed 11%, while WTI advanced 10%.
At present, steady supply and spare capacity among OPEC members have limited further price spikes.
Still, UBS analyst Giovanni Staunovo warned, “Oil prices will rise if supply gets disrupted. Otherwise, they’ll ease if tensions de-escalate.”
Focus Turns To Strait Of Hormuz
Meanwhile, attention has shifted to the Strait of Hormuz, where nearly 20% of global oil passes.
One Iranian lawmaker suggested Tehran could close the strait.
Yet, another official quickly dismissed the idea unless Iran’s vital interests face serious threats.
Consequently, analysts downplayed the threat, citing China’s dependence on Gulf oil and expected international diplomatic pressure.
