The spate between Israel and Iran kept the prices of the crude oil grades above $70 per barrel at the market on Friday, with investor expressing fears that the combat could widely disrupt oil exports from the Middle East.
Brent crude traded at $74.23 a barrel during the trading session, with the US West Texas Intermediate (WTI) crude selling $72.98 a barrel.
Iran’s Revolutionary Guard said it launched hundreds of ballistic missiles at Israel on Friday in retaliation for Israeli strikes attacks aimed at hamstringing Tehran’s nuclear program and weakening the country’s military leadership.
CNN reported that Israeli residents were instructed to go into bomb shelters as smoke could be seen rising over Tel Aviv, while explosions were also heard in Jerusalem.
The Isreali Defense Force (IDF) said that further missile attacks were expected.
Meanwhile, US officials said American forces helped shoot down Iranian missiles headed towards Israel.
Israel had targeted Iran’s nuclear facilities, ballistic missile factories and military commanders on Friday at the start of what it warned would be a prolonged operation to prevent Iran from building an atomic weapon.
According to reports, the commander-in-chief of the Islamic Revolutionary Guard Corps, Hossein Salami, was killed in Israel’s attack on Tehran, along with two other military generals, effectively wiping out Iran’s senior military chain of command.
Also, several scientists who worked on developing Iran’s nuclear programme were also reported to have been assassinated Friday. The overnight strikes were reported to have hit densely populated residential neighborhoods in the capital, killing civilians.
US President Donald Trump urged Iran to make a deal over its nuclear program to put an end to the “next already planned attacks.”
Iran, a member of the Organisation of the Petroleum Exporting Countries (OPEC), currently produces around 3.3 million barrels per day and exports over 2 million barrels per day of oil and fuel.
The latest developments have also stoked concerns about disruptions to the Strait of Hormuz, a vital shipping passage, which could disrupt up the passage of almost 20 million barrels per day of oil, condensate, and fuel.
With tensions in the region surging in recent days, JPMorgan analysts have warned of a possible “exponential” increase in oil prices.