Global oil prices rose sharply after Israel confirmed it had launched a strike on Iran, marking a significant rise in tensions across the Middle East.

Following the news, both major benchmark oil prices—Brent Crude and Nymex light sweet crude—climbed by more than 10%.

Market participants are concerned that rising conflict between Iran and Israel may impact oil supply from the Middle East, a region known for its large energy exports.

Changes in crude oil prices affect a wide range of everyday costs, including fuel prices at petrol stations and the cost of food items.

Energy analysts told the BBC that traders are now paying close attention to whether Iran will respond in the coming days.

“This is a tense and potentially dangerous moment, although it could calm down quickly as it did during previous clashes in April and October last year when both countries exchanged direct attacks,” said Vandana Hari of Vanda Insights.

However, she also warned that the situation could worsen into a larger conflict, which might interfere with oil production and exports from the region.

In a more severe scenario, Iran could affect the flow of millions of barrels of oil per day if it targets key infrastructure or shipping in the Strait of Hormuz.

This strait is one of the most vital waterways in the world for energy transport, with around 20% of global oil supplies passing through it.

At any given time, dozens of oil tankers are either approaching or leaving the Strait of Hormuz as energy is transported from major producers in the Middle East to buyers worldwide.

The Strait lies between Iran to the north and Oman and the United Arab Emirates to the south, linking the Gulf to the Arabian Sea.

“What we’re seeing right now is the market’s first response to risk,” said Saul Kavonic, head of energy research at MST Financial. “But in the next day or two, traders will need to assess how far this situation might escalate.”

Source: BBC

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