Oil prices surged on Friday, June 13, 2025, by more than 7%, reaching their highest levels in months, after reports surfaced that Israel had struck Iran. This development has significantly escalated tensions in the Middle East, a region crucial to global oil supplies, thereby rattling investors and triggering concerns about potential disruptions.
Brent crude futures, a global benchmark for oil prices, rose by $5.29, or 7.63%, to $74.65 a barrel by 0142 GMT. Earlier in the trading session, it had reached an intraday high of $75.32, marking its highest point since April 2. Similarly, U.S. West Texas Intermediate (WTI) crude climbed by $5.38, or 7.91%, to $73.42 a barrel, after hitting a high of $74.35, a level not seen since February 3.
The catalyst for this sharp increase was Israel's announcement that it had conducted strikes in Iran. While details about the specific targets and the extent of the damage remain somewhat unclear, the news immediately heightened anxieties about the stability of the region and its ability to continue supplying oil uninterrupted. Iranian media reported that explosions were heard in Tehran, further fueling concerns.
Market analysts suggest that these concerns stem from the possibility of a broader conflict that could directly impact oil production and transportation. Iran is a major oil producer, holding the fourth-largest position within the Organization of the Petroleum Exporting Countries (OPEC), with a production rate of approximately 3.28 million barrels per day. Beyond its own production, Iran's strategic location near the Strait of Hormuz adds another layer of risk. Approximately 21% of the world's oil supply passes through this narrow waterway, and Iran has, in the past, threatened to block it in response to actions against its interests.
Should Iran retaliate by disrupting oil infrastructure or limiting passage through the Strait of Hormuz, the impact on global oil supplies could be substantial. Some analysts estimate that such actions could hinder up to 20 million barrels per day of oil supply. This scenario has led to immediate risk reassessments, with traders closely monitoring Iran's potential response.
While the situation remains fluid, the immediate market reaction reflects a significant shift in how investors are pricing in the risk of geopolitical instability in the Middle East. The surge in oil prices underscores the market's sensitivity to any event that could potentially disrupt the flow of oil from this critical region. The coming days and weeks will be crucial in determining whether this spike is a temporary reaction or the beginning of a sustained period of higher prices.
