Crude oil roared back to life on 13 June 2025, when Israel launched a wave of strikes on Iranian nuclear and military sites and Tehran answered with missile barrages. Both Brent and West Texas Intermediate (WTI) spiked into double digits, surging more than 11% and briefly over 13% to five-month highs before easing back. After months dominated by oversupply worries, the move signalled the abrupt return of a geopolitical risk premium to the oil market.
Israel's Strikes and Iran's Response Ignite the Rally
Israel's opening assault, later known as Operation Rising Lion, hit uranium-enrichment infrastructure at sites including Natanz and killed several senior Iranian military commanders and nuclear scientists. Iran retaliated within hours, firing a barrage of missiles at Israel as Supreme Leader Ayatollah Ali Khamenei vowed a harsh response. Traders reacted immediately: with the two sides trading direct blows, the market began pricing the risk that Middle East crude supply could be caught in a widening conflict. Oil futures gapped higher the moment the strikes were confirmed.
An Intraday Spike That Settled Near 7%
The scale of the move was dramatic but short-lived. At their peak, Brent and WTI were up more than 13% intraday, with Brent touching roughly $78 a barrel, the highest in nearly five months. As the session wore on and no oil facilities were reported hit, prices pared much of the gain. Brent settled 7.02% higher at $74.23 a barrel and WTI closed 7.26% up at $72.98, both rising from the high-$60s. The double-digit spike that defined the headlines had largely unwound by the close.
The Strait of Hormuz Puts Supply at Center Stage
The core fear behind the rally was supply. Roughly a fifth of the world's oil, and a similar share of its liquefied natural gas, moves through the Strait of Hormuz, the narrow chokepoint off Iran's coast. Any threat to that passage forces traders to price in the possibility of tighter global supply. The risk was not only theoretical: Israel ordered a temporary shutdown of Leviathan, its largest natural gas field, underscoring how quickly regional energy flows can be disrupted once direct hostilities begin between major producers and their neighbours. Tanker owners and insurers also began reassessing war-risk cover for vessels transiting the Gulf, a cost that tends to feed through to freight rates well before any physical supply is actually lost.
What the Surge Means for Traders
For market participants, the episode was a reminder that geopolitical risk can reprice oil in minutes. Analysts at Saxo Bank and Swissquote sketched sharply different paths: a broader escalation that disrupts Gulf shipping could push prices toward $90 to $100 a barrel, while a rapid de-escalation, as seen in earlier Israel-Iran exchanges, could send crude back below $70. As UBS noted, the risk premium tends to persist only until it becomes clear whether supply is actually affected, then fades. The practical takeaway is two-way volatility and the potential for sudden gaps.
Daily market analysis by BCM Markets.