Oil Rises Nearly 3% Amid Escalating Israel-Iran Strikes, Regional Risks

Oil prices have surged nearly 3% due to escalating conflict between Israel and Iran, with Israel intensifying airstrikes on Iran's strategic and government targets including Tehran, as ordered by Prime Minister Benjamin Netanyahu. The attacks notably included a strike on Iran’s uranium enrichment facility at Natanz, damaging critical nuclear infrastructure and heightening fears of regional instability. Investor concerns are compounded by potential U.S. involvement, with President Donald Trump expected to decide within two weeks on possible military action against Iran’s nuclear program. The ongoing conflict raises the risk of disruptions to oil exports through the Strait of Hormuz, a vital chokepoint for global oil shipments, which could drive prices sharply higher—JPMorgan warned that prices might surge to $120-$130 per barrel if the conflict expands or the strait is closed. Analysts have characterized the situation as a flight-to-safety event, leading to inflationary pressures and expectations of a more hawkish Federal Reserve. While Iran is reportedly still years away from nuclear weapon capability, the conflict's escalation threatens significant supply disruptions and geopolitical instability in the oil market.