Oil Prices Jump as Israel Attacks Iran, Syria, and Iraq

Oil prices jumped amid growing concerns about conflict in the Middle East, with Brent crude rising above $90 a barrel in a surprise upward move.

The global benchmark crude oil reversed an early decline after media reports of explosions in Iran, Syria and Iraq. Israel informed the United States on Thursday that it plans to respond to Tehran within 24 to 48 hours, according to U.S. officials.

According to the Daily Mail Israel has conducted strikes on targets in Iran, and officials say the city of Isfahan, a city which hosts one of Iran's nuclear facilitie, was struck at 5 am. 

Traders have been bracing all week for an Israeli response to the Islamic Republic's unprecedented missile and drone attack last weekend, with rhetoric between the two countries escalating, with Iran warning against striking its nuclear facilities. Gold also rose in Friday trading, approaching a record level.

“Unconfirmed reports of strikes in the Middle East may suggest the worst fears have come true,” said Warren Patterson, head of commodity strategy at ING Groep NV in Singapore, with traders bracing for Israel’s response to the attack. Iranian missile and drones.

He added: “If the reports turn out to be correct - and depending on the nature of the strikes - we are approaching a scenario in which supply risks become a reality, and thus the market will likely be forced to start pricing in a larger risk premium.”

The price of crude oil has risen during the year so far, with gains driven by a worsening round of hostilities in the Middle East, as well as OPEC+ supply cuts. The region represents about a third of global crude supplies. High energy prices, if they continue, would increase the risks facing the global economy and pose a challenge to central bankers.

“We continue to highlight the growing risk that this war will escalate,” RBC Capital Markets LLC analysts, including Helema Croft, said in a note before oil prices rose. She added: "Oil supplies could fall into the crosshairs of this expanding conflict."