Oil prices shot up dramatically on Friday after Israel launched strikes against Iran, creating the biggest one-day price increase in nearly three years. The attacks have made investors worry about oil supplies from the Middle East being disrupted.
Brent crude oil, which is used as a global benchmark, jumped $6.29 to reach $75.65 per barrel by early Friday morning. At one point during the day, it hit $78.50 – the highest price since 27 January. This represents a 9% increase in just one day.
American oil prices also surged. West Texas Intermediate crude climbed $6.43 to $74.47 per barrel, after reaching a peak of $77.62 – the highest since 21 January. This was a 9.45% jump.
These price increases are the largest single-day jumps since 2022, when Russia invaded Ukraine and sent energy prices soaring worldwide.
Israel launched strikes against Iran on Friday, targeting several key military sites. The Israeli military said it hit Iran’s nuclear facilities, factories that make ballistic missiles, and killed several military commanders.
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Israel warned that this was just the beginning of a longer military operation aimed at stopping Iran from developing nuclear weapons. This escalation has dramatically increased tensions in the Middle East.
The Middle East produces much of the world’s oil supply, so any conflict in the region makes investors nervous about potential disruptions. When supply might be threatened, oil prices typically rise quickly.
The Strait of Hormuz is a narrow waterway between Iran and several Gulf countries. About one-fifth of the world’s oil passes through this strait every day. If Iran decided to block or attack ships using this route, it could severely disrupt global oil supplies. However, the conflict would need to get much worse before oil supplies are seriously affected.
Iran’s Supreme Leader Ayatollah Ali Khamenei promised that Israel will receive “harsh punishment” for Friday’s attacks. He said the strikes killed several Iranian military commanders.
This threat of retaliation is part of what’s making oil markets nervous. If Iran strikes back against Israel or attacks oil facilities in the region, it could lead to a much larger conflict.
US Secretary of State Marco Rubio said on Thursday that Israel’s strikes were a “unilateral action,” meaning the United States was not involved in planning or carrying them out. However, he also warned Iran not to target American interests or personnel in the region.
The US response to any Iranian retaliation will likely influence how much further this conflict escalates and how long oil prices remain high.
