(MENAFN) Following Israel's military strikes on Iranian territory, global crude oil prices experienced a significant spike, rising by as much as 3.5 percent shortly after the attacks took place. The surge in oil benchmarks saw prices exceeding USD3 a barrel in early trading, though they later retreated to more modest gains. Brent crude oil futures for June delivery were recorded at USD86.63 per barrel, while the May contract for United States West Texas Intermediate (WTI) dropped to USD82.30 per barrel.
Confirmed by a senior United States official in an interview with ABC News, the Israeli attack on Iran marks the latest development in a series of tit-for-tat exchanges between the two nations. Last week, Iran retaliated to a suspected Israeli strike on an Iranian consular building in Syria by launching a barrage of 300 aerial drones and missiles on Israel. The exchange of fire underscores the escalating tensions in the region, with Tehran accusing Israel of orchestrating the bombing, a claim that Israel has neither confirmed nor denied.
As one of the world's major oil producers, Iran holds significant sway in global oil markets. Ranked as the seventh-largest oil producer and the third-largest OPEC member by the United States Energy Information Administration, Iran produces approximately 3.2 million barrels of crude oil per day. In 2023, it stood as the world's second-largest source of oil supply growth after the United States.
The sharp increase in oil prices following the Israeli strikes reflects mounting concerns among analysts about the potential for further escalation of hostilities between Israel and Iran. The volatility in oil markets underscores the sensitivity of geopolitical events in key oil-producing regions and their immediate impact on global energy prices.
As tensions persist between Israel and Iran, market observers will closely monitor developments in the region, assessing the implications for oil supply and demand dynamics. The uncertainty surrounding geopolitical risks underscores the need for vigilance and adaptability in navigating the ever-changing landscape of global energy markets.
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