Oil Prices Surge Amid Israel-Iran Tensions, Trump-Linked Uncertainty
Crude oil markets experienced significant gains on Thursday as escalating tensions between Israel and Iran spurred investor concerns. Uncertainty surrounding President Trump’s potential involvement further contributed to market volatility.
Brent crude futures rose $1.60 to settle at $78.29 per barrel, a 2.1% increase. Similarly, U.S. West Texas Intermediate (WTI) crude for July delivery climbed $1.64 to $78.34, also up 2.1%. The recent peak for Brent was recorded on June 13 at $78.50 per barrel, coinciding with the onset of Israeli military operations, the highest level in nearly five months.
Market activity remained subdued, however, due to reduced trading volumes during the U.S. federal holiday.
The regional conflict has now entered its seventh day, with Israeli forces reportedly targeting Iranian nuclear facilities, while Iranian missiles struck an Israeli medical center.
Tony Sycamore, an analyst at trading platform IG, noted that there is still a “healthy risk premium baked into the price as traders wait to see whether the next stage of the Israel-Iran conflict is a U.S. strike or peace talks.”
On Wednesday, investment bank Goldman Sachs estimated that current geopolitical risks account for approximately a $10-per-barrel premium, citing reduced Iranian output and the possibility of broader regional disruptions that could drive Brent crude above $90.
Phil Flynn, senior analyst at Price Futures Group, said oil prices are unlikely to return to the low $60-per-barrel range seen a month ago, even if tensions de-escalate.
“I think this conflict knocks oil out of its complacency,” Flynn said. “The market has been underplaying geopolitical risk.”
Asked by reporters on Wednesday about possible U.S. military involvement, President Trump said he had not yet decided whether to support Israel with direct action against Iran.
Given Trump’s historically unpredictable approach to foreign policy, “markets remain jittery, awaiting firmer signals that could influence global oil supply and regional stability,” said Priyanka Sachdeva, analyst at Phillip Nova.
RBC Capital analyst Helima Croft warned that the risk of major disruptions to the energy sector could escalate if Iran perceives an existential threat. U.S. involvement, she noted, could provoke direct attacks on oil tankers and critical energy infrastructure.
Iran remains OPEC’s third-largest oil producer, with a daily crude output of approximately 3.3 million barrels. The strategically vital Strait of Hormuz, located along Iran’s southern coast, facilitates the passage of between 18 million and 21 million barrels of oil and petroleum products each day, heightening concerns about potential disruptions to global energy trade routes.
