Oil Prices Spike as Israeli Strikes Disrupt Iranian Energy Infrastructure

Highlights:

• Brent crude surged 5.5% to US$78.32 per barrel at the time of writing, following a 7% jump on Friday—its biggest one-day gain in over three years.
• Israeli strikes on Iran’s South Pars gas facility and fuel tanks raised concerns over major Middle East supply disruptions.
• Oil market volatility intensifies as geopolitical tensions escalate, with global energy companies potentially impacted.

Middle East Tensions Push Oil Markets Higher

Oil prices surged sharply after Israeli military strikes on Iranian energy infrastructure raised fears of supply disruptions from the Middle East. At the time of writing, Brent crude rose as much as 5.5% to US$78.32 per barrel, while West Texas Intermediate (WTI) climbed 6.2%, continuing Friday’s rally—when Brent posted its largest one-day gain in over three years, jumping 7%.

Targeted Attacks on Critical Facilities

The latest escalation in the region came after Israel launched airstrikes on Saturday, temporarily disabling a natural gas processing plant tied to Iran’s South Pars field, the country’s largest. Fuel storage tanks were also hit as part of the targeted strikes, which are reportedly part of Israel’s broader campaign to hinder Iran’s nuclear ambitions. These developments have significantly raised the perceived geopolitical risk premium on crude markets.

Energy Market on Edge

The Middle East remains a crucial hub for global oil production and transport. Disruptions in Iranian energy infrastructure—especially in facilities tied to South Pars—could affect global supply chains if the conflict intensifies. Investors are now closely watching responses from both Tehran and global powers, which could influence whether this rally in prices becomes prolonged or stabilises. Energy companies such as ExxonMobil Corporation (NYSE: XOM) and Chevron Corporation (NYSE: CVX) may see short-term gains as oil prices climb, but analysts caution that heightened volatility could weigh on broader market sentiment.

Outlook Uncertain

While oil bulls benefit in the short term, the broader implications for energy security and diplomatic relations remain deeply uncertain.

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