**Oil Prices Soar as Israeli Strikes on Iran Rattle Global Markets**
In a sudden and dramatic move, oil prices have surged by up to 14% after Israel launched military strikes on Iranian targets. The escalation has sent shockwaves through global energy markets, causing crude benchmarks to jump sharply in response to fears of wider conflict in the Persian Gulf.
**A Twist for Russia: Economic Relief Amid Escalation**
The Israeli attack has also delivered an unexpected economic boost to Russia. In April, Urals crude was priced at around $50 per barrel – a far cry from the $70 benchmark used in Russia’s federal budget. However, with prices now climbing to $65, Moscow’s fiscal gap is narrowing. This comes as Russia continues its full-scale invasion of Ukraine.
**Global Markets React: Crude and Gas Prices Soar**
According to Bloomberg, West Texas Intermediate (WTI) crude topped $77 per barrel at one stage – its biggest intraday gain since May 2020. The price has since eased to around $73. European natural gas also rallied, while gold approached record highs as investors sought safe-haven assets.
**Israel Targets Iranian Nuclear and Missile Facilities**
Last night, Israel launched a series of strikes on multiple locations across Iran, including the Natanz nuclear site and facilities in Tabriz. Israeli Prime Minister Benjamin Netanyahu confirmed that the campaign aimed to neutralize Iran’s nuclear and ballistic missile capabilities, with further retaliation anticipated from Iran.
**Preparing for the Worst: OPEC+ and IEA Take Precautions**
Analysts at SEB AB told Bloomberg that markets are not yet factoring in deep damage to Iranian infrastructure or a full disruption of Hormuz. However, the International Energy Agency has confirmed its readiness to release emergency reserves if needed. Meanwhile, OPEC+ – with most spare capacity located in the Gulf – could raise production to stabilize prices should the situation deteriorate further.
**Russia’s Reliance on Oil and Gas Exports**
In 2024, Russia’s oil and gas sector accounted for about 30% of its federal budget revenue. With a highly militarized economy prioritizing arms and war-related production, it’s clear that Moscow is heavily reliant on oil and gas exports to sustain itself.
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