Oil prices surged on Friday as tensions in the Middle East escalated following reported explosions near the Iranian city of Isfahan. US crude oil futures rose 2.1% to $84.5 per barrel, while Brent crude, the global benchmark, also saw a 2% increase.
According to a US official, Israel carried out an attack inside Iran, sparking concerns of a deeper conflict in the region. Israeli military has yet to comment on the reports of explosions in Iran.
The market reacted strongly to the unrest, with analysts warning that disruptions in oil supplies remain high. The US announcement to reimpose sanctions on Venezuela’s oil industry and Mexico’s decision to reduce exports due to domestic demand only added to the anxiety.
Investors sought refuge in safe assets, causing gold prices to rise 1% to $2,422.4 an ounce, while the price of bitcoin fell below $60,000 as risk appetite waned.
Asian stock markets also took a hit, with Japan’s Nikkei 225, South Korea’s Kospi, Hong Kong’s Hang Seng Index, and China’s Shanghai Composite all recording losses. However, oil suppliers saw their shares rise, with companies like PetroChina, CNOOC, and Sinopec in Hong Kong, and Cosmo Energy and Eneos Corp in Tokyo, all posting gains. S-Oil Corp in Seoul also saw a 2.1% increase in its share price.