Reuters: Oil jumps nearly 9% after Israel's strikes on Iran
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Crude oil analysts are in a rush to revise their forecasts in the wake of Israel’s attacks on Iran as geopolitics trumps fundamentals yet again.
“Oil could spike toward $80 if Middle East tensions escalate and supply risks materialize, but rising OPEC+ output may cap gains and revive oversupply concerns into autumn,” Saxo Markets chief investment strategist Charu Chanana said, as quoted by Bloomberg.
“A worst-case scenario — such as a closure of the Strait of Hormuz or a disruption to Iran’s 2.1 million barrels per day in exports — could have serious implications for global oil supply and inflation expectations,” Chanana added.
Iran has vowed “a harsh response” to the Israeli attacks. Per the latest news updates from Reuters, citing Israeli military sources, Iran launched more than 100 drones at Israel, after Israel targeted uranium enrichment facilities, ballistic missile factories and senior army commanders. The Iranian Revolutionary Guards corps has reported that its headquarters was hit by an Israeli missile and its top commander Hossein Salami was killed.
“Iran’s potential retaliation and blockage of the Straits of Hormuz can” threaten crude oil supplies, Rystad Energy’s head of commodity markets for oil, Mukesh Sahdev said. However, “given the stated US goal of negotiation, it is unlikely that the conflict will escalate into a full-blown war.”
Other analysts are guarded in their expectations of a full-blown war as well. Per Westpac’s head of commodity research Robert Rennie, Israel’s targeting of military facilities and commanders suggest the strikes are more of the pre-emptive kind and not the start of “a sustained military conflict”. The thing to watch, Rennie told Bloomberg, was Iran’s response.
“Risks going into the weekend are very high, and a push above the January highs for crude is very possible,” the analyst said.
The United States has sought to distance itself from the conflict, suggesting that this time it may not throw its full weight behind Israel as it seeks to negotiate with Iran, even though President Trump appeared unhappy about the progress of the talks earlier this week.
“We are not involved in strikes against Iran and our top priority is protecting American forces in the region,” Secretary of State Marco Rubio said in a statement. “Israel advised us that they believe this action was necessary for its self-defense.”
By Irina Slav for Oilprice.com
Oil Price Spike - June 13
Oil Price Spike - June 13
Last edited by dan_s on Fri Jun 13, 2025 7:16 am, edited 1 time in total.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price Spike - June 13
Brent crude oil futures briefly rose above $78 before settling around $74 per barrel on Friday, reaching their highest level since February amid fears of supply disruptions following Israel’s strike against Iran.
> Israel declared a special situation, suggesting Iran could soon retaliate against Israeli targets, fueling concerns over escalating tensions. The prospect of a broader Middle East conflict threatens to disrupt the Strait of Hormuz, a key route for about 20% of global oil flows.
> Adding to geopolitical risks, the US is preparing a partial evacuation of personnel from the region after Iran threatened to target US bases if nuclear talks fail.
> Further supporting prices, EIA data showed US crude stocks fell more than expected last week, signaling strong demand, while softer US inflation reinforced expectations of Fed rate cuts by September, potentially boosting economic growth and oil consumption.
> For the week, oil is on track for its best performance since late February 2022.
> Israel declared a special situation, suggesting Iran could soon retaliate against Israeli targets, fueling concerns over escalating tensions. The prospect of a broader Middle East conflict threatens to disrupt the Strait of Hormuz, a key route for about 20% of global oil flows.
> Adding to geopolitical risks, the US is preparing a partial evacuation of personnel from the region after Iran threatened to target US bases if nuclear talks fail.
> Further supporting prices, EIA data showed US crude stocks fell more than expected last week, signaling strong demand, while softer US inflation reinforced expectations of Fed rate cuts by September, potentially boosting economic growth and oil consumption.
> For the week, oil is on track for its best performance since late February 2022.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price Spike - June 13
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.
Under a worst case scenario, JPMorgan analysts said on Thursday that closing the strait or a retaliatory response from major oil producing countries in the region could lead to oil prices surging to $120-130 a barrel, nearly double their current base case forecast.
"The key question now is whether this oil rally will last longer than the weekend or a week - our signal is that there is a lower probability of a full-blown war, and the oil price rally will likely encounter resistance," said Janiv Shah, analyst at Rystad.
"Fundamentals show nearly all Iranian exports going to China, so Chinese discounted purchases would be most at risk here. OPEC+ spare capacity can provide the stabilizing force," he added.
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.
"The increased uncertainty speaks in favour of a higher risk premium on the oil price, which is why it is unlikely to fall below $70 on a sustained basis for the time being ... Fundamental data is taking a back seat in the current situation," analysts at Commerzbank said in a note.
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.
Under a worst case scenario, JPMorgan analysts said on Thursday that closing the strait or a retaliatory response from major oil producing countries in the region could lead to oil prices surging to $120-130 a barrel, nearly double their current base case forecast.
"The key question now is whether this oil rally will last longer than the weekend or a week - our signal is that there is a lower probability of a full-blown war, and the oil price rally will likely encounter resistance," said Janiv Shah, analyst at Rystad.
"Fundamentals show nearly all Iranian exports going to China, so Chinese discounted purchases would be most at risk here. OPEC+ spare capacity can provide the stabilizing force," he added.
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.
"The increased uncertainty speaks in favour of a higher risk premium on the oil price, which is why it is unlikely to fall below $70 on a sustained basis for the time being ... Fundamental data is taking a back seat in the current situation," analysts at Commerzbank said in a note.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price Spike - June 13
Retired Air Force Brig. Gen. Blaine Holt told Newsmax on Thursday that the strikes in Tehran tell him that Israel might be going for a "decapitation strike" on Iran and its leaders.
Holt also asserted that the countries are now "in a state of war."
Holt joined "Finnerty" to react to Israel's airstrike offensive on Iran, an operation dubbed "Strength of a Lion."
Multiple reports and images out of Iran show that Israeli Defense Forces were making precision airstrikes on apartment buildings in Tehran, the country's capital. Major damage was reported to multiple buildings in Tehran.
"Israel and Iran are in a state of war now," Holt said. "And they may have caught the Iranian leadership off guard and out of their bunkers, and they may be going for a decapitation strike here. That's what the Tehran thing tells me right now."
----------------------------------
Eight months of intensive preparations led to Israel's attack aimed at Iran's top military officers and scientists, as well as nuclear and missile sites.
Israel's military said about 200 aircraft were involved in Friday's initial attack on about 100 targets.
The attack was aided by the Mossad intelligence service having operatives on the ground conducting covert sabotage operations on missile and air defense sites.
Israeli Prime Minister Benjamin Netanyahu ordered his military and intelligence services to begin planning for the attack after Iran and its proxies struck Israel in October, Axios reported Friday.
Adding to Netanyahu's motivation was Iran's fast-growing missile arsenal and its weakened air defenses following Israel's retaliation. Israel also had intelligence indicating Iran could build a nuclear bomb relatively quickly if it chose to.
Israeli officials maintain that despite President Donald Trump's public comments that the U.S. was not involved in the attack on Iran, Washington had coordinated with the plan.
Tel Aviv wanted Iran to think no attack was imminent so that Iranians on Israel's target list wouldn't move to new locations.
"We had a clear U.S. green light," one Israeli official told Axios.
Following the strikes, the United States underlined it was not involved in the Israeli action and warned Iran not to attack its personnel or interests, but Tehran said Washington would be "responsible for consequences."
Before the attack, Trump said he believed a deal on Iran's nuclear program was "fairly close," cautioning however that an Israeli attack on its arch foe could wreck the chances of an agreement.
Netanyahu was set to speak to Trump on Friday, CNN reported.
During a brief phone call with the network Friday morning, Trump said the U.S. supported Israel and called the strikes on Iran last night "a very successful attack."
"We, of course, support Israel, obviously, and supported it like nobody has ever supported it," Trump said.
"Iran should have listened to me when I said — you know I gave them, I don't know if you know, but I gave them a 60-day warning, and today is day 61."
Earlier on Truth Social, Trump urged Iran to reach a deal with Washington on its nuclear program, warning that Israel's attacks "will only get worse."
Holt also asserted that the countries are now "in a state of war."
Holt joined "Finnerty" to react to Israel's airstrike offensive on Iran, an operation dubbed "Strength of a Lion."
Multiple reports and images out of Iran show that Israeli Defense Forces were making precision airstrikes on apartment buildings in Tehran, the country's capital. Major damage was reported to multiple buildings in Tehran.
"Israel and Iran are in a state of war now," Holt said. "And they may have caught the Iranian leadership off guard and out of their bunkers, and they may be going for a decapitation strike here. That's what the Tehran thing tells me right now."
----------------------------------
Eight months of intensive preparations led to Israel's attack aimed at Iran's top military officers and scientists, as well as nuclear and missile sites.
Israel's military said about 200 aircraft were involved in Friday's initial attack on about 100 targets.
The attack was aided by the Mossad intelligence service having operatives on the ground conducting covert sabotage operations on missile and air defense sites.
Israeli Prime Minister Benjamin Netanyahu ordered his military and intelligence services to begin planning for the attack after Iran and its proxies struck Israel in October, Axios reported Friday.
Adding to Netanyahu's motivation was Iran's fast-growing missile arsenal and its weakened air defenses following Israel's retaliation. Israel also had intelligence indicating Iran could build a nuclear bomb relatively quickly if it chose to.
Israeli officials maintain that despite President Donald Trump's public comments that the U.S. was not involved in the attack on Iran, Washington had coordinated with the plan.
Tel Aviv wanted Iran to think no attack was imminent so that Iranians on Israel's target list wouldn't move to new locations.
"We had a clear U.S. green light," one Israeli official told Axios.
Following the strikes, the United States underlined it was not involved in the Israeli action and warned Iran not to attack its personnel or interests, but Tehran said Washington would be "responsible for consequences."
Before the attack, Trump said he believed a deal on Iran's nuclear program was "fairly close," cautioning however that an Israeli attack on its arch foe could wreck the chances of an agreement.
Netanyahu was set to speak to Trump on Friday, CNN reported.
During a brief phone call with the network Friday morning, Trump said the U.S. supported Israel and called the strikes on Iran last night "a very successful attack."
"We, of course, support Israel, obviously, and supported it like nobody has ever supported it," Trump said.
"Iran should have listened to me when I said — you know I gave them, I don't know if you know, but I gave them a 60-day warning, and today is day 61."
Earlier on Truth Social, Trump urged Iran to reach a deal with Washington on its nuclear program, warning that Israel's attacks "will only get worse."
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price Spike - June 13
I must have missed this chapter in “The Art Of The Deal. “