Oil prices surge as investors await Iranian response to US strikes

Global oil prices briefly surged to their highest level since January on Monday, June 23, 2025, following the United States’ weekend strikes on Iran’s nuclear facilities, before easing back amid uncertainty over Tehran’s response.

As of 09:04 GMT, Brent crude futures edged up 8 cents to $77.09 per barrel, while U.S. West Texas Intermediate (WTI) rose by just 3 cents to $73.87.

Both benchmarks had earlier hit five-month highs of $81.40 and $78.40 respectively before sliding in early European trading.

Despite fears of an imminent oil supply crisis, there has been no actual disruption to oil flows from the Middle East so far.

Investors remain cautious, however, as geopolitical tensions keep the market volatile.

“The geopolitical risk premium is fading for now, as there’s been no supply cut. But markets remain edgy.

Volatility is here to stay,” said Giovanni Staunovo, energy analyst at UBS.

Since the conflict between Iran and Israel intensified on June 13, Brent crude has climbed approximately 11%, with WTI up 9% — driven largely by speculation that Iran may retaliate by targeting vital oil infrastructure or disrupting exports.

Energy analysts continue to monitor the Strait of Hormuz, through which nearly 20% of the world’s oil passes daily.

A serious threat to shipping in the strait could send global prices spiraling.

“All eyes remain on the Strait of Hormuz … and whether Iran will seek to disrupt tanker traffic,” said Ole Hansen, Head of Commodities Strategy at Saxo Bank.

Even a temporary delay in shipments through the strait could spike prices, Hansen warned — with traders likely to price in risk premiums even in the absence of physical blockades.

The price surge followed a bold announcement by President Donald Trump, who claimed responsibility for an operation that “obliterated” Iranian nuclear targets over the weekend.

The U.S. move, coordinated with Israeli forces, marked a major escalation in the region’s unfolding conflict.

Iran responded angrily on Monday, calling Trump a “gambler” and vowing retaliation.

Tehran said the attacks expanded the “range of legitimate targets” for its armed forces, sparking fears of counterstrikes.

In a new note, Goldman Sachs projected that Brent crude could briefly hit $110 per barrel if oil flows through the Strait of Hormuz were halved for a single month.

While the investment bank does not currently expect a major disruption, it warned of temporary supply shocks if tensions escalate further.

In such a scenario, oil supplies could remain reduced by 10% for nearly a year, the bank said.

While Iran may threaten the closure of Hormuz, analysts say such a move could backfire economically.

As OPEC’s third-largest crude producer, Iran relies heavily on oil exports through the same strait.

“Closing Hormuz would inflict as much harm on Iran as it would on the West,” said Sugandha Sachdeva of SS WealthStreet.

“It’s a high-stakes, double-edged sword.”

Market outlook remains volatile. Traders and governments worldwide are on high alert as Iran’s next move could define oil supply trajectories for weeks to come.

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