Oil prices jumped sharply on Friday after Israel struck Iranian nuclear and military sites, a move that shook global markets and heightened fears of a major regional conflict.
US light crude oil and Brent crude recorded their strongest one-day gains since March 2022, when Russia invaded Ukraine. In addition, both benchmarks posted their biggest weekly gains since October 2022.
US oil rose 7.26% to around $72.98 per barrel. Brent rose 7% to close at around $74.23 per barrel. Earlier in the day, prices had jumped 14% and 13%, respectively.
“Markets are now focusing their attention on a potential escalation of the situation,” commented Jim Reid, a strategist at Deutsche Bank.
Iran later responded with an attack, firing hundreds of ballistic missiles at Israel.
“The main channel through which this escalation could affect the global economy is precisely higher oil prices,” analysts at Capital Economics told CNN.
Rising oil prices could also reignite inflationary pressures, complicating decisions for central banks such as the US Federal Reserve. | BGNES