Oil back above $90 a barrel after Israel attacks Iran

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Oil prices jumped $3 a barrel on Friday in reaction to unconfirmed reports on X that explosions had occurred in Iran, sparking concerns that Middle East oil supply could be disrupted.

Brent futures jumped $3.03, or 3.5%, to $90.14 a barrel by 0147 GMT, and US West Texas Intermediate crude rose $3.03, or 3.7%, to $85.76 per barrel.

“There are some unconfirmed reports of explosions in the Middle East,” ING’s head of commodity research, Warren Patterson, said.

The reports have sparked worry that Israel has responded to Iran’s drone and missile attack of last weekend, Patterson said.

Investors have been closely monitoring Israel’s reaction to the April 13 Iranian drone attacks on Israel. The geopolitical risk premium in oil prices had been unwinding this week on the perception that any Israeli retaliation to Iran’s attack would be moderated by international pressure.

In global crude oil supply, Venezuela lost a key U.S. license allowing the OPEC member to export oil to markets globally. The U.S. also announced sanctions on Iran, another OPEC member, targeting its unmanned aerial vehicle after the country’s drone strike on Israel last weekend.

The sanctions on Iran, however, exclude its oil industry.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow