Key Points:
- Israel airstrikes raise tensions in global oil markets.
- Crude prices see biggest jump since Ukraine war began.
- Iran may retaliate by targeting the Strait of Hormuz.
- China unlikely to support disruptions in oil supply.
- OPEC’s spare capacity may help calm oil markets.
- Tehran’s next move could reshape global energy dynamics.
ISLAMABAD: Israel’s recent airstrikes targeting Iran’s military leadership and nuclear infrastructure have sharply intensified geopolitical tensions in the oil market.
As reported by Bloomberg — a leading global business and financial news organisation headquartered in New York City — the strikes sent crude prices soaring, marking the largest daily gain since Russia’s invasion of Ukraine in 2022.
“Brent crude briefly surged above $78 a barrel, the highest level since January.”
The trajectory of the oil market now hinges on Iran’s response. The most extreme possibility is a retaliatory move by Iran to shut down the Strait of Hormuz, a critical chokepoint at the mouth of the Arabian Gulf.
Approximately 18 million barrels of oil — a quarter of global seaborne supply — pass through the narrow waterway daily.
A full-scale blockade, according to JPMorgan Chase & Co — one of the largest and most influential financial institutions in the world — could trigger one of the most significant supply disruptions in modern oil market history, potentially sending prices as high as $130 a barrel.
However, military feasibility aside, Iran may be hesitant to take such a drastic step.
The United States would likely respond with a naval deployment to ensure the strait remains open, potentially drawing its full military might into the conflict.
China — Iran’s largest oil customer — would also likely oppose any escalation that could cause a spike in global energy prices.
A more probable scenario, Bloomberg notes, is that Iran might adopt a strategy of calibrated harassment of shipping routes — similar to recent tactics by Houthis in the Red Sea. These would increase shipping costs and maintain elevated oil prices, delivering economic impact without crossing into full-scale conflict.
There are already reports suggesting that some tanker operators are showing reluctance to enter the Gulf region.
Organization of the Petroleum Exporting Countries (OPEC) will also play a crucial role in how the situation unfolds.
Helima Croft of RBC Capital Markets noted in a report cited by Bloomberg, “If oil is caught in the cross-fire, we anticipate that President Trump will seek OPEC spare barrels to try to keep a lid on prices and shield US consumers from the economic impact of the Middle East conflict.”
The situation remains volatile, and with market nerves on edge, the focus now turns squarely to Tehran’s next move.
