Oil prices surged Friday, settling more than 7% higher after Israel and Iran exchanged air strikes, intensifying fears that broader conflict could disrupt Middle East oil exports. Brent crude settled at $74.23 a barrel, up $4.87 or 7.02%, after earlier jumping over 13% to $78.50—the highest since January 27. U.S. West Texas Intermediate crude ended at $72.98, up $4.94 or 7.62%, after reaching $77.62 intraday, the strongest level since January 21.
These were the largest intraday moves for both benchmarks since 2022, when Russia’s invasion of Ukraine roiled energy markets. Israel confirmed it had struck Iranian nuclear and military targets in what it described as the start of a prolonged campaign. Iran vowed to retaliate, and shortly after trading closed, Iranian missiles reportedly struck buildings in Tel Aviv.
Despite the hostilities, Iranian oil facilities remained operational, with no damage reported. Iran currently produces around 3.3 million barrels per day and exports over 2 million. Analysts noted that OPEC+ has enough spare capacity to offset potential Iranian disruptions if necessary.
Still, concern focused heavily on the Strait of Hormuz, through which 18 to 19 million barrels per day—or about 20% of global oil consumption—flow. Analysts warned that any attempt to block the strait would severely damage Iran’s own economy and its oil relationship with China.
While oil and gold prices soared, global equity markets tumbled as investors sought safety in the U.S. dollar and Swiss franc.