Global oil markets surged dramatically on Friday, with Brent and U.S. crude benchmarks rising more than 7%, as Israel launched a direct strike on Iranian targets. The move has sparked fears of a broader conflict in the Middle East and potential disruptions to global oil supply.

Brent crude jumped $5.29 (7.63%) to $74.65 per barrel by early Friday trading in Asia, peaking at $75.32—the highest level in over two months. Similarly, West Texas Intermediate (WTI) crude surged $5.38 (7.91%) to reach $73.42, touching an intraday high of $74.35, its strongest performance since early February.

The Israeli government confirmed that its military operation targeted key Iranian facilities, including nuclear infrastructure and missile production sites. Prime Minister Benjamin Netanyahu stated the strikes aimed to "undermine Iran’s capabilities" related to its nuclear ambitions and regional military presence.

Tensions were already elevated as the U.S. has been pushing Iran to curb its production of nuclear materials. Reports from Iranian media indicated explosions were heard in Tehran, prompting Iran to declare a state of emergency and prepare for possible retaliation.

Energy analysts warn that although current oil production remains unaffected, the geopolitical risks are significant. “The risk premium has surged,” said Saul Kavonic, senior energy analyst at MST Marquee. He added that a full-scale retaliation by Iran—such as targeting oil infrastructure or blocking the Strait of Hormuz—could endanger up to 20 million barrels per day of global oil supply in a worst-case scenario.

The situation has also triggered a sharp reaction across financial markets. Asian stocks dropped in early trade, U.S. futures fell, and investors moved towards traditional safe havens like gold and the Swiss franc. Market sentiment has shifted firmly towards risk-off, with traders reassessing positions ahead of the weekend.

“This escalation has rattled investors,” said Tony Sycamore, market analyst at IG. “We’re likely to see further risk aversion until there’s clarity on Iran’s response.”

The U.S. has distanced itself from Israel’s military action, with Secretary of State Marco Rubio labeling the strike a “unilateral move” and urging Iran not to threaten American interests in the region. While Washington has refrained from direct involvement, any expansion of the conflict could pull in global powers and roil commodity markets further.

As the situation develops, traders and policymakers alike will be closely monitoring Iran’s next steps. A military response could trigger wider instability across the oil-rich region, potentially affecting not just supply routes but also broader market stability.

Disclaimer: The information contained herein (1) is proprietary to BCR and/or its content providers; (2) may not be copied or distributed; (3) is not warranted to be accurate, complete or timely; and, (4) does not constitute advice or a recommendation by BCR or its content providers in respect of the investment in financial instruments. Neither BCR or its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.