Oil jolted by US-Israel strike on Iran, analysts react
Brent’s price has jumped over the weekend after US and Israeli forces struck Iran – a development that was widely priced in by analysts for weeks.
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The Israel Defense Forces (IDF) and the US Central Command (CENTCOM) have jointly launched a major combat operation - Epic Fury - on Iran, in a final bid to “obliterate” Iran’s nuclear and missiles procurement efforts, US President Donald Trump said.
The strikes come days ahead of a further round of nuclear negotiations in Vienna. “They [Iran] can never have a nuclear weapon,” Trump said in an official video statement issued by the US government.
The operation has reportedly eliminated the Islamic Republic’s Supreme Leader Ayatollah Ali Khamenei, Reuters reported.
Oil market analysts had been cautioning for weeks that such an escalation was possible, as earlier rounds of indirect talks in Geneva failed to produce any breakthrough between Washington and Tehran.
Market analysts have expressed concerns over disruption in transits through the Strait of Hormuz.
About 20% of global crude oil passes through the Strait of Hormuz – making it a critical chokepoint for global oil trade, SPI Asset Management managing partner Stephen Innes said.
Meanwhile, Iran has retaliated with a multitude of strikes, targeting US military bases across the region including the US Fifth Fleet headquarters in Bahrain, bases in Qatar, Kuwait and the UAE, and even residential areas.
ICE Brent could increase to $80-90/bbl, according to ING Bank’s head of commodities strategy Warren Patterson.
Iranian missiles have hit Dubai International Airport, Erbil International Airport in Iraq, the port of Dubai, Haifa oil refinery, residential areas in Israel, US CENTCOM said on social media platform X.
There remains “risks for further strength towards $100/bbl and ultimately $140/bbl (worst-case scenario), if we are to see significant and extended oil supply disruptions,” Patterson said.
The attacks are primarily in response to the death of Khamenei and other high ranking Iranian officials, media reports suggest.
“Those [Iranian] missiles will be destroyed, along with Iran’s missile production. The Iranian navy will be destroyed," US Secretary of War Pete Hegseth commented.
Several tanker owners have suspended crude, fuel and LNG shipments via the Strait of Hormuz after Tehran closed the critical waterway, Reuters reported.
“A small set of tankers in the Gulf of Oman have been confirmed diverting or pausing ahead of the Strait of Hormuz,” cargo tracking platform Kpler said.
By Aparupa Mazumder
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