Crude reacts to Israel-Iran Clash

On June 13, 2025, Israel attacked close to 100 sites in Iran, targeting areas including Tehran, nuclear facilities, and missile sites with more than 200 aircraft, this attack would threaten the supply side leading to a surge in crude oil prices.

What caused Israel to attack Iran?

It is reported, Iran has been making large investments in nuclear weapons and has been producing tons of uranium, a radioactive metal sufficient for nine nuclear bombs. Iran could make a nuclear weapon within a year, if not halted, Prime Minister of Israel, Benjamin Netanyahu claims.

Impact on Crude Oil

Iran is among the top ten oil producers and is ranked as the third-largest holder, supplying nearly 3 million barrels per day and a reduction in this would pose a threat, from a macro perspective if Israel attacks oil facilities or causes damage, this might disrupt the oil supply which in turn could make the prices surge resulting in inflation. Additionally, geopolitical tensions related to whether Iran should stop the supply of oil through the Strait of Hormuz, via which approximately 20% of the oil passes, were observed. Natural gas, heating oil, and gasoline surged 4%. Gasoline prices recorded the highest levels in the last 10 weeks.

At the time of attack crude oil prices increased substantially, touching $71.4 per barrel from $65.4 per barrel during the opening session and then dropped to approximately $68.6 per barrel after which consolidated, as no damage was seen to the oil facilities.

A mid-year commodities outlook report will be released shortly...