Oil prices fluctuated on Friday, briefly spiking as much as 3% after Israel hit back at Iran in a retaliatory strike, further heightening tensions in the Middle East.
Brent crude prices briefly reached above $90 per barrel after a US official told ABC News that Israel launched missile strikes against Iran late Thursday.
The attack came after Iran rained down more than 300 drones and missiles toward the Jewish nation last Saturday — though nearly all were intercepted by Israel and its allies.
Israel’s early morning retaliatory strike, however, appeared to be “limited,” according to a military source — though an Iranian official told Reuters that the explosions heard in Isfahan were a result of the activation of Iran’s air defense systems.
No missile attack was carried out against Iran, the official added, sending Brent’s price falling, erasing earlier gains.
At the time of writing, Brent — the international benchmark — was trading at roughly $81 per barrel.
Meanwhile, America’s oil benchmark, US West Texas Intermediate, saw futures dip 0.4% to trade at $82.29 per barrel, similarly wiping out gains earlier in the session.
Rapidan Energy’s Director of Global Oil Service, Clay Seigle, told CNBC that the “big risk” for oil markets amid the escalating Middle East war is that oil exports from the Arabian Gulf will be cut off.
The region, for reference, is responsible for more than 20 million barrels of oil per day.
Oil prices could also be sent surging if the Strait of Hormuz — located between Oman and Iran — is cut off as roughly one-fifth of global oil production flows through the narrow waterway daily, according to CNBC.
“A Hormuz disruption would be very serious for the world economy, potentially driving oil prices well into the triple digits to levels that induce demand destruction,” Seigle said, per CNBC.
Israel has maintained that it did carry out the strike, which was labeled by Israel’s controversial National Security Minister Itamar Ben Gvir as “lame” in a post on X.
Ben Gvir’s comment also drew criticism from officials in Prime Minister Benjamin Netanyahu’s inner circle, claiming he had compromised national security, Israel Channel 12 reported.
Israel is still reportedly assessing the strike’s effectiveness and damage caused, though it was appearing to target the city of Isfahan — home of Iran’s Natanz nuclear research facility and a major air base.
A scroll alerting viewers to a “loud noise” near Isfahan was displayed on Iranian state television, but provided no other information, according to the Associated Press.
State television claimed that all nuclear sites in the region were “fully safe.”
All flights bound for the cities of Tehran, Isfahan and Shiraz have been diverted, an Iranian official announced on state-run television, per the Times of Israel.
In addition, Iran’s air defense systems were activated in several provinces after the explosions first rang out, state news outlet IRNA reported, according to CNN.
The Biden administration “didn’t endorse” Israel’s response, a US official told the outlet — supporting Joe Biden’s earlier warning to Netanyahu after Saturday’s Iranian strike that the US would not take part in a counter-offensive.
“We do not have anything to offer at this time,” a Pentagon spokesperson told The Post on Thursday when asked about the reported airstrikes.
Read More: Oil briefly jumps 3% after Israel launches strikes at Iran