Oil Prices Surge, Stocks Fall After Israel Strikes Iran
Oil prices surged while stocks fell on Friday after Israel attacked Iranian military and nuclear facilities, raising concerns of a potential war.
Investors fled to safer assets following reports of the strikes and a warning from Tehran that their adversary would face a “bitter and painful” retribution, with US President Donald Trump indicating that a “massive conflict” in the area could be on the horizon.
Israeli Prime Minister Benjamin Netanyahu stated in a video message: “This operation will persist for as long as necessary to eradicate this threat.” In Tehran, Supreme Leader Ayatollah Ali Khamenei cautioned that Israel would endure severe repercussions, declaring that, “With this act, the Zionist regime has sealed its own bitter and painful fate, which it will undoubtedly receive.”
Israeli Defence Minister Israel Katz earlier warned that “a missile and drone assault against the State of Israel and its civilian population is imminent.”
Trump had previously mentioned that he believed a “fairly good” deal regarding Iran’s nuclear program was “close,” but that an Israeli attack on Iran could jeopardise the prospects for such an agreement.
A US official indicated no American involvement in the military operation.
Nevertheless, there are concerns that the United States could become entangled in the conflict after Iran threatened this week to target US military installations in the area if a regional war ensued.
On Friday, Iran’s foreign ministry stated that the United States would bear “responsibility for the consequences” of the strikes, emphasising that these attacks “cannot have been conducted without Washington’s coordination and permission”.
Both major oil contracts, which had seen increases earlier in the week due to escalating tensions, surged by over 12 per cent, reaching heights not seen since January, amid concerns over the resource’s availability.
They slightly retreated after Iran announced that its essential refineries and fuel storage facilities remained untouched, although prices stayed above five per cent.
The shift from risk assets to safer havens caused stock markets across Asia and Europe to decline, while bonds rallied alongside gold, which surpassed $3,400 an ounce.
