Oil price surges as markets react to increased conflict in Middle East


OIL prices jumped as much as 4.2% this morning after Israel launched a strike against Iran.

The price of Brent crude was as high as $90.67 a barrel in the early hours of the morning, though has eased to little more than $88 a barrel, still an increase of more than 1%.

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US officials reported Israel launched retaliatory strikes on Iran. State-run Iranian media said defence batteries were launched in the early hours of Friday morning after explosions were reportedly heard near Isfahan, in the centre of the country.

Iran has said the attack resulted in no major damage, prompting suggestions form analysts that it was ‘de-escalatory’, but the country’s foreign minister has already warned that his country would act “decisively and properly” to any further attacks.

Energy market expert Vandana Hari, of Vanda Insights, said: “The initial spike in oil prices was “a knee-jerk reaction to fears of a renewed escalation of warfare between Israel and Iran.

“What the latest events underscore is the heightened fragility and volatility in the Mid East situation,” she added.

The Middle Eastern country is the seventh largest oil producer in the world and is the third-largest member of Opec.

The Strait of Hormuz, a key shipping route which connects the Persian Gulf and the world’s oceans, could be impacted, which would increase concerns of global oil supply.

The shipping route lies between Iran and Oman with about a fifth of the world’s total oil supply passing through it.

Iran has already seized a commercial ship with links to Israel as it passed through the strait on Saturday.

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