Oil spikes amid renewed Israel-Iran hostilities
Oil prices have rallied once again as Israel and Iran exchanged fire on Sunday, heightening geopolitical concerns in the Middle East region.
IMAGE: Flags of the US, Iran and Israel. Getty Images
The Israel Defense Forces (IDF) has struck military sites in western and central Iran a short while ago, it said on social media platform X.
The escalation has put upward pressure on Brent’s price, which is once again trading near the $100/bbl mark.
The attack follows Iran’s launch of a missile barrage toward Israel in retaliation for a strike on Beirut’s southern suburbs in Lebanon, Reuters reported.
“The IDF identified missiles launched from Iran toward Israel. Defensive systems are operating to intercept the threat,” the IDF said in a statement.
On Sunday, Israel struck a command centre in Beirut’s Dahieh area. The site was controlled by Lebanon-based Hezbollah militants, the IDF claimed. Earlier that day, the militant group targeted northern Israel with missiles, the IDF said.
The latest reports have reignited supply disruption concerns while casting doubt on the future of US-Iran peace talks.
“Every exchange of fire adds another layer to the geopolitical risk premium embedded in crude,” SPI Asset Management managing partner Stephen Innes said.
Market participants are now weighing whether this escalation is merely a diplomatic setback or the end of the line for ongoing negotiations.
“Crude oil began the week by reminding traders that markets rarely move on events themselves. They move on the perceived probability of what comes next,” Innes added.
The oil market’s window to mitigate the impact of the Strait of Hormuz closure is rapidly closing, as viable replacement options for the disrupted barrels continue to dwindle.
By Aparupa Mazumder
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