Crude oil prices surged ahead of US President Donald Trump and Israel launching military action against Iran in the early hours of this morning.
Latest trading data shows the prices of Brent crude oil sits at around $72.5 to $72.9 per barrel, while the US benchmark WTI oil comes to around $67 per barrel.
Before Saturday’s events, concerns about potential conflict had already driven oil prices more than 15 per cent higher since the start of the year, offsetting broader expectations of oversupply.
Israeli forces launched a pre-emptive military assault on Tehran early this Saturday, with multiple explosions reported across the Iranian capital. The operation marks a dramatic escalation in Middle East tensions that has sent shockwaves through global energy markets.
Crude oil surges in response to President Trump’s actions
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Israeli Defence Minister Israel Katz described the strikes as essential action aimed at destroying Iran’s nuclear capabilities and missile systems.
The military intervention has effectively ended a short-lived diplomatic opening that emerged during February. Negotiations between Washington and Tehran collapsed earlier this week in Geneva, with President Trump expressing frustration at what he characterised as bad-faith bargaining by the Iranian side.
Iran, a founding member of OPEC, is a major oil producer and is situated strategically at Strait of Hormuz trading, through which about 20 per cent of the world’s oil passes.
OPEC+ delegates have confirmed to Bloomberg that the alliance will now weigh a more aggressive production increase when it convenes for an emergency session on Sunday.
Donald Trump confirms major US military operation in Iran
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The Saudi-led group had previously been expected to implement only modest supply additions from April onwards. This shift in strategy represents an attempt to create a liquidity cushion for global markets rattled by the sudden outbreak of hostilities.
According to OPEC+, the group’s primary objective is to prevent a damaging price surge that could undermine worldwide economic growth. By indicating readiness to release substantial additional barrels, the cartel hopes to insulate energy costs from the immediate geopolitical turmoil.
Market participants are now focused on Sunday’s formal announcement to determine whether the proposed significant increase will prove sufficient to stabilise prices.
West Texas Intermediate rose 2.8 per cent to settle above $67 per barrel, reaching its highest close since August.
The cost of oil has surged in response to geopolitical tensions
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REUTERSPrediction markets reflected the growing anxiety, with Polymarket showing the probability of American military action against Iran by March 1 jumping from nine per cent at market open to roughly 26 per cent by mid-afternoon in New York.
Traders remain particularly concerned about potential disruption to the Strait of Hormuz, the narrow waterway separating Iran from the Arabian Peninsula.
Bob McNally, president of Rapidan Energy Group, warned that “Iran has the capability to make Hormuz unsafe for commercial passage for a time measured in weeks, not hours or days.”
The immediate threat now centres on possible Iranian retaliation targeting American military installations or energy infrastructure across neighbouring Gulf states.