Oil prices surged by over three percent in early Asian trading on Friday following unconfirmed reports of explosions in Iran, Syria, and Iraq. This sparked fears of a worsening Middle East crisis. West Texas Intermediate rose by 3.66 percent to $85.76, and Brent increased by 3.44 percent to $90.11.
The reports followed a missile attack on Israel by Iran last weekend, which Israel’s army chief General Herzi Halevi warned would be met with a response. Tehran launched over 300 ballistic and cruise missiles and attack drones, most of which were repelled by air defenses. Iranian leaders stated the strike was a legitimate response to a deadly attack on an Iranian embassy building in Damascus, which they blamed on Tel Aviv.
Oil prices rallied and equities fell as explosions were reportedly heard in Iran and Syria, fueling fears of a further escalation of the Middle East crisis. This came after another set of data indicating the US economy remained strong, raising concerns that the Federal Reserve might hold off on cutting interest rates this year or even raise them.
The news sent shockwaves through markets, with crude briefly surging by as much as four percent due to concerns about oil supplies from the region. However, gains were tempered as Iran downplayed the situation, denying reports of explosions at the Isfahan nuclear facility. Asia equities fell initially but recovered from their early lows.
