There was no sign of an exit strategy from either side and Trump says he will decide whether the US will get involved ‘in the next two weeks’
19 June 2025 - 07:26
UPDATED 19 June 2025 - 21:21
byAmanda Stephenson
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Calgary — Oil prices jumped almost 3% on Thursday as a week-old air war between Israel and Iran escalated and uncertainty about potential US involvement kept investors on edge.
Brent crude futures settled up $2.15, or 2.8%, to $78.85 a barrel, its highest close since January 22. US West Texas Intermediate crude for July was up $2.06, or 2.7%, to $77.20 at 5.30pm GMT.
Trading volumes were light on Thursday due to a US federal holiday. Israel bombed nuclear targets in Iran on Thursday, and Iran fired missiles and drones at Israel after hitting an Israeli hospital overnight.
There was no sign of an exit strategy from either side, as Israeli Prime Minister Benjamin Netanyahu said Tehran's "tyrants" would pay the "full price" and Iran warned against a "third party" joining the attacks.
The White House said on Thursday that US President Donald Trump will decide whether the US will get involved in the Israel-Iran conflict in the next two weeks.
That prospect has crude prices grinding higher, said Rory Johnston, analyst and founder of the Commodity Context newsletter.
"Consensus (in the market) is increasingly forming that we will see US involvement in some way," Johnston said.
Iran is the third-largest producer among members of the Opec oil cartel, extracting about 3.3-million barrels per day (bpd) of crude oil.
About 18-million to 21-million bpd of oil and oil products move through the Strait of Hormuz along Iran’s southern coast, and there is widespread concern the fighting could disrupt trade flows.
The risk of major energy disruption will rise if Iran feels existentially threatened, and U.S. entry into the conflict could trigger direct attacks on tankers and energy infrastructure, said RBC Capital analyst Helima Croft.
On Thursday, JPMorgan said an extreme scenario, in which the conflict widens to the broader region and includes a Strait of Hormuz closure, could result in oil prices surging to $120 to $130 per barrel.
Goldman Sachs said on Wednesday that a geopolitical risk premium of about $10 a barrel is justified, given lower Iranian supply and risk of wider disruption that could push Brent crude above $90.
Even if Middle East tensions were to cool off in the coming days, oil prices are probably not headed back to the low $60 range they were trading at a month ago, said Phil Flynn, senior analyst at the Price Futures Group.
"I think this (conflict) knocks oil out of its complacency," said Flynn. "I would argue that the market has been underplaying geopolitical risk."
But DBRS Morningstar said in a note on Thursday that it expects any sudden oil price surge to be temporary.
A higher oil price will exacerbate tariff-related headwinds to the global economy and oil demand, so as long as the conflict recedes, the war premium will deflate and prices will cycle lower, DBRS said. Russia’s top oil official said on Thursday Opec+ oil producers should proceed with plans to increase output, noting rising summer demand.
Russian deputy prime minister Alexander Novak said at an economic forum in St Petersburg that Opec+ should calmly execute its plans and not scare the market with forecasts.
Update: June 19 2025 This story has been updated with new information.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil prices jump nearly 3% on Israel-Iran conflict
There was no sign of an exit strategy from either side and Trump says he will decide whether the US will get involved ‘in the next two weeks’
Calgary — Oil prices jumped almost 3% on Thursday as a week-old air war between Israel and Iran escalated and uncertainty about potential US involvement kept investors on edge.
Brent crude futures settled up $2.15, or 2.8%, to $78.85 a barrel, its highest close since January 22. US West Texas Intermediate crude for July was up $2.06, or 2.7%, to $77.20 at 5.30pm GMT.
Trading volumes were light on Thursday due to a US federal holiday. Israel bombed nuclear targets in Iran on Thursday, and Iran fired missiles and drones at Israel after hitting an Israeli hospital overnight.
There was no sign of an exit strategy from either side, as Israeli Prime Minister Benjamin Netanyahu said Tehran's "tyrants" would pay the "full price" and Iran warned against a "third party" joining the attacks.
The White House said on Thursday that US President Donald Trump will decide whether the US will get involved in the Israel-Iran conflict in the next two weeks.
That prospect has crude prices grinding higher, said Rory Johnston, analyst and founder of the Commodity Context newsletter.
"Consensus (in the market) is increasingly forming that we will see US involvement in some way," Johnston said.
Iran is the third-largest producer among members of the Opec oil cartel, extracting about 3.3-million barrels per day (bpd) of crude oil.
About 18-million to 21-million bpd of oil and oil products move through the Strait of Hormuz along Iran’s southern coast, and there is widespread concern the fighting could disrupt trade flows.
The risk of major energy disruption will rise if Iran feels existentially threatened, and U.S. entry into the conflict could trigger direct attacks on tankers and energy infrastructure, said RBC Capital analyst Helima Croft.
On Thursday, JPMorgan said an extreme scenario, in which the conflict widens to the broader region and includes a Strait of Hormuz closure, could result in oil prices surging to $120 to $130 per barrel.
Goldman Sachs said on Wednesday that a geopolitical risk premium of about $10 a barrel is justified, given lower Iranian supply and risk of wider disruption that could push Brent crude above $90.
Even if Middle East tensions were to cool off in the coming days, oil prices are probably not headed back to the low $60 range they were trading at a month ago, said Phil Flynn, senior analyst at the Price Futures Group.
"I think this (conflict) knocks oil out of its complacency," said Flynn. "I would argue that the market has been underplaying geopolitical risk."
But DBRS Morningstar said in a note on Thursday that it expects any sudden oil price surge to be temporary.
A higher oil price will exacerbate tariff-related headwinds to the global economy and oil demand, so as long as the conflict recedes, the war premium will deflate and prices will cycle lower, DBRS said. Russia’s top oil official said on Thursday Opec+ oil producers should proceed with plans to increase output, noting rising summer demand.
Russian deputy prime minister Alexander Novak said at an economic forum in St Petersburg that Opec+ should calmly execute its plans and not scare the market with forecasts.
Update: June 19 2025
This story has been updated with new information.
Reuters
Two oil tankers collide near Strait of Hormuz
MAMOKETE LIJANE: Iran-Israel war adds uncertainty to rates, rand outlook
Iran-Israel conflict boosts oil
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