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The US and Israel launched military strikes against Iran, escalating regional tensions and disrupting global markets. The attacks, delayed from last week due to operational challenges, have triggered a sharp rise in oil prices as the Strait of Hormuz faces severe supply disruptions. Iran’s retaliatory actions and regional conflicts further amplify volatility. The Strait, handling 20% of global oil supply, is now effectively inaccessible due to security risks, with Saudi Arabia and the UAE unable to fully offset the lost volume. While oil prices surged to $75 initially, they have since retreated to $71 amid profit-taking and uncertainty over the conflict’s duration. The immediate impact is bullish for oil, but long-term risks include a potential supply glut if Iran resumes sanctioned exports, which could weigh on prices. Traders must monitor the Strait’s status and geopolitical developments to gauge future market direction.
