Rising oil prices stir global concern over potential Israel-Iran clash
Oil prices on the New York commodity exchange are rising sharply in response to reports that Israel may strike Iranian nuclear facilities, according to brokers.
A barrel of West Texas Intermediate crude for July delivery is priced at $63.10 on the NYMEX in New York, up 1.73%. Earlier, the commodity gained 3.5%.
Brent on ICE for July is priced at $66.42 a barrel, after an increase of 1.59%.
According to U.S. intelligence, Israel is preparing to attack Iran's nuclear facilities. Such an attack by the Israeli government would be a "brazen break" from President Donald Trump's policy, say American officials cited by CNN. They added that the strike could contribute to a broader conflict in the Middle East, which U.S. diplomacy consistently wants to avoid.
At this time, it is unclear whether Israeli leaders have made a decision to strike. U.S. President Donald Trump is trying to negotiate a nuclear agreement with Iran that would limit the country's nuclear program in exchange for lifting some sanctions.
The U.S. emphasizes that the main goal of the agreement is to prevent Iran from building a nuclear weapon.
Meanwhile, headlines about U.S.-Iran nuclear talks are currently "mixed," and it is unknown when the parties could potentially reach an agreement that would pave the way for increased Iranian oil supplies to markets, which would likely contribute to an oil surplus in global markets in the second half of 2025.
However, a possible Israeli attack on Iranian nuclear facilities could hinder progress in U.S.-Iran talks and increase tension in the Middle East, from where about one-third of the world's oil supplies originate.
The market awaits a U.S.-Iran agreement
Israel has long considered an attack on Iran's nuclear program. However, a serious question remains about how many of Iran's nuclear power plants are secured against potentially extreme attacks.
Robert Rennie, head of commodities and CO2 emissions research at Westpac Banking Corp, believes that crude oil may continue to carry a risk premium for as long as ongoing talks surrounding Iran's nuclear programme appear unproductive.
Analysts assess that if a U.S.-Iran nuclear agreement were reached, the price of oil could fall to $40 a barrel, especially as more oil is also planned to be supplied to markets by OPEC+.
