Oil prices surge as fears of Israeli strike on Iran grow
Oil prices on the New York commodity exchange are rising sharply in response to reports that Israel might strike Iranian nuclear facilities, according to brokers.
A barrel of West Texas Intermediate crude for July delivery is priced at $63.10 on the NYMEX in New York, up 1.73%. Earlier, the commodity gained 3.5%.
Brent on ICE for July is priced at $66.42 a barrel, after an increase of 1.59%.
According to US intelligence, Israel is preparing to attack Iran's nuclear facilities. Such an attack by the Israeli government would be a "brazen break" from President Donald Trump's policy, stated American officials cited by CNN. They added that the strike could lead to a broader conflict in the Middle East, which US diplomacy is keen to avoid.
At this time, it is unclear whether Israeli leaders have decided to strike. US President Donald Trump is trying to negotiate a nuclear agreement with Iran that would limit the country’s nuclear programme in exchange for lifting some sanctions.
The US emphasises that the main goal of the agreement is to prevent Iran from building a nuclear weapon.
Currently, headlines about US-Iran nuclear talks are "mixed," and it is not clear when an agreement might be reached, potentially allowing increased Iranian oil supplies to markets, which would likely contribute to an oil surplus globally in the latter half of 2025.
For now, however, a potential Israeli attack on Iranian nuclear facilities could impede progress in US-Iran talks and heighten tension in the Middle East, from where about one-third of the world's oil supplies originate.
The market awaits a US-Iran agreement
Israel has long considered an attack on Iran’s nuclear programme. However, there remains a significant question concerning how many of Iran's nuclear power plants are protected against potentially severe attacks.
Robert Rennie, head of commodities and CO2 emissions research at Westpac Banking Corp, believes that crude oil may continue to carry a risk premium for as long as ongoing talks surrounding Iran's nuclear programme appear unproductive.
Analysts suggest that if a US-Iran nuclear agreement were reached, the price of oil could fall to $40 a barrel, especially as more oil is also planned to be supplied to markets by OPEC+.
