FACTBOX: Oil surges as Israel strikes Iran nuclear sites, traders eye supply risks

Crude prices saw their largest single-day jump in as many as five years on June 13 following "pre-emptive" strikes by Israel against Iranian nuclear facilities, which could pose a major threat to oil flows if tensions escalate further.

"[The attack is] obviously bullish near term for oil prices, but the key is whether oil exports will be affected," said Richard Joswick, head of near-term oil analysis at S&P Global Commodity Insights.

"When Iran/Israel exchanged attacks last time, prices spiked, then fell once clear, not escalating and had no impact on oil supply," he added, in reference to tit-for-tat exchanges between the two countries last year.

Prime Minister Benjamin Netanyahu said the operation would continue "for as many days as it takes to remove this threat," signaling that there would be more strikes in the days ahead.

Analysts say the June 13 strikes could be far more significant. In a note, JP Morgan analysts said that in a worst-case scenario, the supply impact could exceed 2.1 million b/d of Iranian exports, potentially pushing Dated Brent into the range of $120-$130/b.

Israel's strikes killed the chief of Iran's Islamic Revolutionary Guards, Hossein Salami, as well as nuclear scientists. Early on June 13, Iran launched a retaliatory attack against Israel, officials in Jerusalem said.

There are dozens of nuclear sites spread across Iran, and Israel said it struck the "heart" of Iran's nuclear program, targeting the enrichment facility in Natanz. The attack comes as the US and Iran have had multiple rounds of talks to reach a new nuclear deal, but Israel and the US have staunchly opposed any agreement that would let Iran enrich uranium.

On June 12, Iran's atomic organization chief Mohammad Eslami said the third uranium enrichment facility was ready for centrifuge installation, and the International Atomic Energy Agency's board of governors formally declared the same day that Iran breached its non-proliferation obligations for the first time in 20 years.

With the strikes prompting fears that the region could see fresh conflict emerge, the Saudi foreign ministry condemned Israel's attack, describing Iran as a "sisterly" nation. The US, meanwhile, distanced itself from Israel's actions.

"Tonight, Israel took unilateral action against Iran. We are not involved in strikes against Iran, and our top priority is protecting American forces in the region," US Secretary of State Marco Rubio said.

Some analysts have maintained that neither the US nor Iran wants an all-out regional war despite the recent escalation.

The sixth round of nuclear talks between the US and Iran was scheduled to take place in Oman June 15, but Iran has reportedly pulled out of the round.

Trade flows

The Middle East region produces a large chunk of the world's crude, and its key waterways, including the Strait of Hormuz and the Red Sea, see huge volumes of commercial shipping.

Since the Israel-Hamas war began, however, Yemen-based Houthi rebels have claimed attacks on more than 130 vessels in the Red Sea and Gulf of Aden, citing support for Palestinians.

The June 13 escalation "could also boost freight rates, tanker insurance premiums, narrow the Brent-Dubai spread and hurt refinery margins, particularly in Asia," Commodity Insights' Joswick said.

"If Iranian crude exports are disrupted, Chinese refiners, the sole buyers of Iranian barrels, would need to seek alternative grades from other Middle Eastern countries and Russian crudes," he said. Other Asian consumers, including Japan and South Korea, are also on alert, according to reports from Platts.

• UK MTO issued guidance late June 12, saying "there is no direct evidence that commercial shipping is being targeted," but there is potential for "rapid escalation."
• Japan is watching developments closely for any oil supply disruptions, a government official told Platts June 13.
• Japan's Cosmo Oil refiner and ship operator Mitsui O.S.K. Lines has issued safety alerts for tankers in the Persian Gulf.
• Commercial shipping transits via the Red Sea remain some 60% below levels before attacks by Houthi militants in late 2023, according to tanker tracking data.
• There is a risk to LNG supply if Iran retaliates by threatening shipping through the Strait of Hormuz. Just under 20% of global LNG exports pass through there, mainly Qatari cargoes, but some shipments from the UAE also transit the strait, Commodity Insights analysts said in a note.
• Freight rates for Red Sea transits have shown little change since mid-2024. Platts assessed the rate to carry a 140,000 mt cargo of crude from the Persian Gulf to the Mediterranean at an average of $16.98/mt in July 2024 and at an average of $16.07/mt since May 6, 2025.

Prices

Prices have strengthened on news of the strike, though it is unclear how much impact this will have in the medium to long term.

War risk premiums rarely last long, said Ehsan Khoman, head of commodities research at MUFG. Only in cases where supply is significantly impacted, such as during Iraq's invasion of Kuwait in 1991, did prices stay elevated for more than 100 days, he said.

A Dubai-based trader told Platts June 13, "We think that this is going to be a long war and the bear is dead."

• Front-month ICE Brent futures hit $75.58/b at 0445 GMT, up 8.97% from the previous close. It follows steps by OPEC+, of which Iran is a member, to boost output, which has dented prices in recent months, especially amid concerns over demand.
• Middle East crude spreads have reacted strongly to the news, with the prompt July-August Dubai futures time spread pegged by Platts at $1.57/b as of 11 am Singapore time (0300 GMT) June 13, wider from Platts' assessment of the spread at 88 cents/b at the Asian close June 12.
• The front-month August IFAD Murban against same-month Dubai futures has also surged, with the contract trading as high as a premium of $3.71/b on the Intercontinental Exchange in early Asian trade, up from when Platts assessed August cash Murban at a $1.82/b premium over Dubai futures at the Asian close June 12. The contract has since eased to be trading around a $2.72/b premium as of 11:10 am Singapore time.
• NYMEX July crude rallied 9% to an intraday high of $74.35/b, but at 0146 GMT, crude was up $5.57 at $73.61/b. ICE August Brent was $5.42 higher at $74.78/b, after earlier rallying to $75.32/b.

Infrastructure

Iran had warned earlier this week that US bases were within reach should the situation escalate, and the US evacuated nonessential staff and family members from some diplomatic and military postings in Iraq, Bahrain, and Kuwait.

Non-nuclear energy infrastructure has not been expressly threatened by any party thus far, but refineries, storage units, and pipelines have been historically targeted across the Persian Gulf in past regional conflagrations.

• Iran's oil refineries and depots have not been damaged, the country said in a statement following the attack, while oil companies in Iraq and Bahrain told Platts on June 12 they are monitoring the situation closely.
• Iran holds about 2.2 million b/d of crude refining capacity and another 600,000 b/d of condensate splitter capacity.
• The country pumped 3.25 million b/d of crude in May, according to the latest Platts OPEC Survey from Commodity Insights, from its host of oilfields, which largely lie in the west of the country.
• It also has considerable gas fields in the southwest, from which it has historically exported gas to neighboring Iraq.
• In semiautonomous Iraqi Kurdistan, one oil company source expressed concern for resources near the Iranian border, which have been targeted during past flare-ups.