Oil and gold prices skyrocket after Israel’s attack on Iran

The prices of oil and gold surged sharply on Friday, June 13, 2025, while global stock markets dropped in response to Israel’s recent military strikes on Iran, intensifying fears of a broader conflict in the Middle East, a region central to global oil production.

According to The Guardian, following the news of Israel’s actions, Brent crude oil prices spiked by over 10%, hitting the highest levels seen since January.

Although prices moderated slightly later, oil still showed a 7.8% increase, trading at $74.77 per barrel, putting it on track for the largest daily rise since March 2022.

The spike had immediate ripple effects across industries, especially aviation, with major airlines rerouting to avoid regional airspace.

Investors, anticipating further instability, moved assets into traditional safe havens such as gold and the Swiss franc.

Shares in British Airways’ parent company IAG and budget airline easyJet fell around 4%, reflecting investor concern.

In contrast, defense contractor BAE Systems saw a nearly 3% rise, highlighting market expectations of prolonged conflict.

Oil giants BP and Shell also benefited from the rising oil prices, with BP’s shares up 3% and Shell’s climbing by 2%.

Meanwhile, gold prices rose approximately 1%, trading at $3,417 per ounce, approaching the all-time high of $3,500 reached in April.

Analysts attribute the surge to heightened geopolitical uncertainty.

Charu Chanana, chief investment strategist at Saxo, noted that the conflict added “another layer of uncertainty to already fragile market sentiment.”

The impact was felt across global financial markets. In Asia, stock indices dropped significantly: Japan’s Nikkei fell 1.3%, South Korea’s Kospi dropped 1.1%, and Hong Kong’s Hang Seng declined 0.8%.

European markets also reacted negatively, with major indices in Germany, France, Italy, and Spain losing over 1%. In London, the FTSE 100, which had closed at a record high the previous day, slipped 0.3%.

US markets were expected to mirror this trend when trading resumed.

Futures indicated sharp declines, with S&P E-mini futures down 1.7% and Nasdaq futures falling 1.8%.

Israel described the operation as a “pre-emptive strike” aimed at halting Iran’s nuclear weapons development.

In response, Iran reportedly launched around 100 drones, prompting Israel to declare a state of emergency.

Marco Rubio, the U.S. Secretary of State, emphasized that the United States had no role in the strikes, stating that Israel had acted unilaterally.

The US Treasury yield on 10-year notes also dropped to a one-month low of 4.31%, reflecting the move to safer investments.

The US dollar index rose 0.5%, while the euro slipped 0.4% and the British pound lost 0.5%.

Derren Nathan, head of equity research at Hargreaves Lansdown, highlighted growing concern not just over Iran’s oil exports but also potential disruptions in the Strait of Hormuz.

Hormuz is a strategic waterway through which nearly 20% of global oil and even more liquefied natural gas is transported.

The Strait of Hormuz and surrounding maritime routes are essential for the passage of oil, grain, and other goods.

Disruption in this region could severely impact global shipping lanes.

Maritime concerns have led the UK Department for Transport to advise all UK-flagged ships to avoid the Red Sea and Gulf of Aden.

Additionally, the Greek shipping association has requested information from shipowners regarding vessel movements through the Strait.

Peter Sand of maritime analytics firm Xeneta warned that a blockade or de facto closure of the Strait would force shipping routes to shift.

According to him, this would increase reliance on Indian west coast ports and likely causing delays, congestion, and higher freight costs.

Sand also noted that a large-scale return of container ships to the Red Sea now “seems less likely.”

The region has already seen disruptions due to attacks on vessels by Iran-aligned Houthi rebels in Yemen.

This supposedly led many carriers to reroute ships around the Cape of Good Hope, significantly increasing journey lengths and transport costs.

The conflict has also affected the energy sector directly.

UK-based gas producer Energean announced the temporary shutdown of operations at its facility off northern Israel’s coast.

The suspension followed a directive from Israel’s Ministry of Energy and Infrastructure, citing safety concerns due to the regional tensions.

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