Oil prices rise after Israeli strike on Iran
Oil increased, stock collapsed and investors sought security in US dollars and government bonds on Friday, when Israel hit the Iranian nuclear and military goals in an attack, which took the risk of war between the two countries and broader instability in the Middle East.
The futures for the S&P500 fell 0.9 percent before the bell, while the futures were one percent below the Dow Jones Industrial Average. NASDAQ futures slipped 1.1 percent.
US benchmark crude oil rose $ 4.73 US, or 6.9 percent, $ 72.77 per barrel, its biggest advantage from early days of Russia’s attack on Ukraine for more than three years. Brent crude, international standard, climbed from $ 4.58 to $ 73.94 per barrel, even the largest single-day jumped after the Russian invasion.
Richard Joswik, head of near-term oil in S&P Global Commodity Insights, said that oil prices are likely to increase short-term, but the important question is whether exports are affected.
He wrote in an email analysis, “When Iran and Israel exchanged the first attacks, the prices started initially, but once it became clear that the situation did not increase and had no effect on the oil supply,” he wrote in an email analysis.
“Oil price risk premium may increase rapidly if Iran conducts comprehensive counter -retaliation attacks, especially if on other targets other than Israel,” Joswik said.
He said that China is the only customer for Iranian oil, but could seek alternative supply from Middle Eastern exporters and Russia. Iran’s oil trade is restricted by Western sanctions and import restrictions, and Israel only exports a small amount of oil and oil products.
The yield on a 10 -year Treasury fell from 4.41 percent to 4.35 percent late on Wednesday and increased to about 4.80 percent earlier this year. Treasury bonds and dollars often rise when investors feel less willing to take risks.
Goldman Sachs said in a note on Friday, while it included a high geophysical risk premium in its adjusted summer 2025 oil price approach, it has no disruption in the Middle East Oil supply after the Israeli attacks on Iran.
Ristada analyst Zenive Shah said, “Now the important question is whether this oil rally will last longer than weekends or a week-our indication is that there is less probability of a fully developed war, and the price of oil will be likely to resist the possibility of rally.”
He said, “Fundamentals show almost all Iranian exports going to China, so Chinese concessional shopping will be the highest risk here. OPEC+ spare capacity can provide stable force,” he said.
In other markets, shares dived and had a crowd for safe hawels such as gold and Swiss francs.
The increase in oil prices will also reduce the approach to the German economy, Economic Institute DIW Berlin said on Friday. It is the only G7 nation that has not done any economic development for two consecutive years.
