Oil prices surged in reaction to Israel’s overnight strike on Iran. Both Brent and West Texas Intermediate (WTI) spiked 11% higher in the immediate aftermath of the attack, but then drifted back a touch.
Heading towards midday UK time, both WTI and Brent were around 8% higher for the session. The sharp rally reflects growing fears that any Iranian retaliation, or broader regional fallout, could disrupt supply lines.
Iran remains a key OPEC+ producer, and with tensions now escalating rapidly, traders wasted no time bidding up crude. Oil’s overnight spike saw front-month WTI briefly top $75 per barrel, hitting its highest level since January this year.
Source: TradingView
Oil prices had been climbing steadily over the past fortnight. Front-month WTI briefly dipped below $60 this time two weeks ago, and went on to break above $65 on Tuesday.
The question now is whether this latest escalation in the Middle East triggers more of a protracted break-out in oil, or if it is viewed as a flash in the pan event.
One of the market’s fears is that an escalation leads to further disruption of shipping through the Strait of Hormuz, through which around 20% of global oil is transported.
