Oil prices jumped more than 5% on Friday to hit the highest in more than two months after Israel said it struck Iran, raising concerns of escalating tensions in the Middle East that could disrupt oil supplies.
Brent crude futures rose $3.91, or 5.64%, to $73.27 a barrel by 0146 GMT, the highest since April 3. U.S. West Texas Intermediate crude was up $4.09, or 6.01%, at $72.13 a barrel.
Israel said early on Friday that it struck Iran, and Iranian media said explosions were heard in Tehran as tensions mounted over U.S. efforts to win Iran’s agreement to halt production of material for an atomic bomb.
“The Israeli attack on Iran has heightened the risk premium further,” MST Marquee senior energy analyst Saul Kavonic said.
“The conflict would need to escalate to the point of Iranian retaliation on oil infrastructure in the region before oil supply is actually materially impacted,” he said, adding that Iran could hinder up to 20 million barrels per day of oil supply via attacks on infrastructure or limiting passage through the Strait of Hormuz in an extreme scenario.
(Reporting by Sam Li and Florence Tan; Editing by Christian Schmollinger)