Oil prices jumped nearly 9% on Friday to near multi-month highs after Israel launched strikes against Iran, sparking Iranian retaliation and raising worries about a disruption in Middle East oil supplies.
Brent crude futures were up $6.19, or around 8.9%, to $75.55 a barrel at 1019 GMT, after hitting an intraday high of $78.50, the highest since January 27.
U.S. West Texas Intermediate crude was up $6.22, or 9.1%, at $74.26 after hitting $77.62, its highest level since January 21.
Friday’s gains were the largest intraday moves for both contracts since 2022, after Russia’s invasion of Ukraine caused a spike in energy prices.
Israel said it had targeted Iran’s nuclear facilities, ballistic missile factories and military commanders on Friday at the start of what it warned would be a prolonged operation to prevent Tehran from building an atomic weapon, while Iran has promised a harsh response.
U.S. President Donald Trump urged Iran to make a deal over its nuclear programme, to put an end to the “next already planned attacks.”
The National Iranian Oil Refining and Distribution Company said oil refining and storage facilities had not been damaged and continued to operate.
The primary concern was whether the latest developments would affect the Strait of Hormuz, said SEB analyst Ole Hvalbye. The key waterway had been at risk of impact from increased regional volatility previously but had not been affected so far, Hvalbye said.
There also was no impact to oil flow in the region so far, he added.
About a fifth of the world’s total oil consumption passes through the strait, or some 18 to 19 million barrels per day (bpd) of oil, condensate and fuel.
Analysts at consultancy Sparta Commodities said that any significant crude supply disruptions would lead to sour crude grades being marginally priced out of refineries in favour of light sweets.
In other markets, stocks dived and there was a rush to safe havens such as gold and the Swiss franc.
An increase in oil prices would also dampen the outlook for the German economy, the economic institute DIW Berlin said on Friday. It is the only G7 nation that has recorded no economic growth for two consecutive years.
