Oil Jumps Toward $90 After Israel Is Said to Strike Iran Targets
(Bloomberg) -- Oil jumped after US officials said Israel struck targets in Iran, with Brent rallying on concerns over the potential for a wider regional conflict that could endanger crude supplies.
Global benchmark Brent surged — topping $90 a barrel at one point, before paring gains — after reports of explosions in Iran, Syria and Iraq. Israel launched a strike against Iran, according to two US officials. An explosion was heard in the central city of Isfahan, the semi-official Fars news agency said. Nuclear facilities in the city are safe, state television reported.
![](https://assets.bwbx.io/images/users/iqjWHBFdfxIU/icp17nnl0jOQ/v2/-1x-1.png)
Traders have been girding for an Israeli response to the Islamic Republic’s unprecedented missile and drone attack last weekend, with the rhetoric between the two escalating as Tehran warned against striking its nuclear facilities. The Middle East accounts for about a third of global crude supplies.
Haven assets also rose as tensions ratcheted higher. Gold spiked toward a record, before giving back some of its gains, while the US dollar climbed to a multi-month high.
“Depending on the nature of strikes, we are moving closer toward a scenario where supply risks become a reality,” said Warren Patterson, head of commodities strategy at ING Groep NV in Singapore. “The market will likely have to start pricing in an even larger risk premium.”
Crude has rallied this year, with gains driven by the worsening hostilities in the Middle East, as well as OPEC+ supply cuts that have tightened the market. Higher energy prices, if sustained, would boosts risks for the global economy and pose a challenge for central bankers as they seek to tame inflation.
The supply curbs orchestrated by OPEC+, which include cutbacks in Saudi Arabia as well as Russia, mean that the producer group has a buffer of unused capacity of several million barrels a day. At present, the output restrictions are set to last through the first half of this year.
![](https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iUgelbGNMjig/v3/-1x-1.jpg)
Among the initial reports about Iran, ABC News, citing an unidentified US official, said Israeli missiles hit a site in the country. Separately, the Mehr news agency said that flights had been suspended in Tehran, Isfahan and Shiraz.
Trading volumes spiked, with nearly 400,000 lots of Brent and over 330,000 of West Texas Intermediate traded by about noon in Singapore, far more than usual. There was also active trading of Brent June and July call options — which profit when prices gain. The premium of call options over put options also surged to the most since early 2022.
“We continue to highlight the heightened risk that this war will move up the escalation ladder,” RBC Capital Markets LLC analysts including Helima Croft said in a note before crude’s spike. “Oil supplies could be caught in the cross-hairs of this metastasizing conflict.”
©2024 Bloomberg L.P.
KEEPING THE ENERGY INDUSTRY CONNECTED
Subscribe to our newsletter and get the best of Energy Connects directly to your inbox each week.
By subscribing, you agree to the processing of your personal data by dmg events as described in the Privacy Policy.
More oil news
![Energy Connect Story Thumbnail](/images/default/oilandgasgeneric.jpg?anchor=center&mode=crop&width=240&height=135&format=webp)
Woodside Looks to Build ‘Dream Team of LNG’ at Acquired US Plant
![Eni](/media/zrnnqrv2/eni.jpg?anchor=center&mode=crop&width=240&height=135&rnd=132771144027800000&format=webp)
Eni signed exclusivity agreement with KKR for the potential sale of a minority stake in Enilive
![Woodside](/media/tq5juvf3/woodside.jpg?anchor=center&mode=crop&width=240&height=135&rnd=132834340121370000&format=webp)
Woodside's quarterly revenues exceed $3 billion backed by strategic milestones
![BloomburgMedia_SGUY72T0AFB400_22-07-2024_06-22-21_638572032000000000.jpg](/media/cfwjsnpi/bloomburgmedia_sguy72t0afb400_22-07-2024_06-22-21_638572032000000000.jpg?anchor=center&mode=crop&width=240&height=135&rnd=133661029417000000&format=webp)
Oil Rises as Biden Quits US Race, Blazes Threaten Canadian Wells
![BloomburgMedia_SGZSI8T1UM0W00_22-07-2024_07-32-52_638572032000000000.jpg](/media/yq5nxplm/bloomburgmedia_sgzsi8t1um0w00_22-07-2024_07-32-52_638572032000000000.jpg?anchor=center&mode=crop&width=240&height=135&rnd=133661071728370000&format=webp)
Kamala Harris Seen as Tougher Oil Industry Opponent Than Biden
![Oil And Gas Refinery Plant](/media/czhapv55/oil-and-gas-refinery-plant.jpg?anchor=center&mode=crop&width=240&height=135&rnd=132900920345270000&format=webp)
PetroChina joins Oil and Gas Decarbonisation Charter
![GALP](/media/1dpp15bu/galp.png?anchor=center&mode=crop&width=240&height=135&rnd=133661151184570000&format=webp)
Galp reports 16% rise in Q2 2024 net profit amid higher oil prices and lower production costs
![BloomburgMedia_SGXF3CT0AFB400_21-07-2024_06-00-10_638571168000000000.jpg](/media/pp5dhnc3/bloomburgmedia_sgxf3ct0afb400_21-07-2024_06-00-10_638571168000000000.jpg?anchor=center&mode=crop&width=240&height=135&rnd=133660152100830000&format=webp)
Nigeria’s Dangote Refinery Targets Output of 550,000 Barrels a Day
![BloomburgMedia_SGUD23DWLU6800_22-07-2024_07-49-38_638572032000000000.jpg](/media/ey5kep5x/bloomburgmedia_sgud23dwlu6800_22-07-2024_07-49-38_638572032000000000.jpg?anchor=center&mode=crop&width=240&height=135&rnd=133661081780600000&format=webp)
Oil Falls With Broader Commodity Weakness Amidst Listless Trade
![BloomburgMedia_SGVJS1T0G1KW00_19-07-2024_20-00-09_638569440000000000.jpg](/media/5yomaqhj/bloomburgmedia_sgvjs1t0g1kw00_19-07-2024_20-00-09_638569440000000000.jpg?anchor=center&mode=crop&width=240&height=135&rnd=133658928099030000&format=webp)
Occidental Planning to Sell Bonds in Up to Five Parts
![CSIS Thumbnail](/media/o0acqjyg/csis_thumbnail.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133566075809700000&format=webp)
CSIS: long-term LNG demand to reshape global export capacity growth
![Dr Carole Nakhle Thumbnail](/media/gqrpjths/dr-carole-nakhle_thumbnail.png?anchor=center&mode=crop&width=540&height=300&rnd=133542056370600000&format=webp)
More women in energy vital to the industry’s success
![Vandana Hari Thumbnail](/media/gz3dyktl/vandana-hari-thumbnail.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133511540022930000&format=webp)
India’s energy sector presents lucrative opportunities for global companies
![OIL INDIA Thumbnail (1)](/media/oddlww2x/oil-india-thumbnail-1.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133506537128730000&format=webp)
Oil India charts the course to ambitious energy growth
![DNV Thumbnail](/media/chkphnjn/dnv-thumbnail.png?anchor=center&mode=crop&width=540&height=300&rnd=133491856590700000&format=webp)
Maritime sector is stepping up to the challenges of decarbonisation
Partner content
![Navigating the trading seas: exploring the significance of benchmarks-1859882229](/media/qlacaiww/navigating-the-trading-seas-exploring-the-significance-of-benchmarks-1859882229.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133613577584600000&format=webp)
Navigating the trading seas: exploring the significance of benchmarks
![New Lng Ship Web 17829](/media/vjrjyypa/new-lng-ship-web-17829.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133179936218300000&format=webp)
Back to the Future(s): the best commodities benchmarks are still physically settled
![Dr Klaus](/media/4eyh2dr0/dr-klaus.jpg?center=0.3953747239980292,0.50683017007953435&mode=crop&width=540&height=300&rnd=133517897092430000&format=webp)
Ebara Elliott Energy offers a range of products for a sustainable energy economy
![ESSAR](/media/5uafghtj/essar.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133524466961070000&format=webp)
Essar outlines how its CBM contribution is bolstering for India’s energy landscape
![HNC 7611 V2](/media/0dqbya15/hnc_7611_v2.jpg?anchor=center&mode=crop&width=540&height=300&rnd=133517899616530000&format=webp)