Crude Oil Prices Spike Amid Fears of Israeli Military Action on Iran

Crude oil price levels witnessed an uptrend after multiple reports signalled a possible escalation in the Middle East conflict. The price of the commodity jumped after reports indicated that Israel might be preparing an attack against Iran.

As per a report by CNN, the US has received intel that Israel is preparing to strike the Iranian nuclear facilities. This news development comes even as the Trump administration attempts to take a diplomatic route with Tehran. The West Texas Intermediate futures soared by around 3.5% to over $64.19 per barrel as fears of escalating tensions in the Middle East rose.

However, officials cited in the CNN report have raised caution over the news development as it's not clear whether Israeli leaders have made the finalised decision or not.

However, “the chance of an Israeli strike on an Iranian nuclear facility has gone up significantly in recent months,” according to sources with knowledge of US intelligence on the issue, cited in the report. “And the prospect of a Trump-negotiated US-Iran deal that doesn’t remove all of Iran’s uranium makes the chance of a strike more likely,” the sources further said.

Oil Market Outlook

So far this year, oil price levels have remained largely volatile, albeit in the red territory. The sudden surge in supply levels by OPEC+ nations, despite faltering demand levels, has resulted in a sharp drop in oil prices.

Even as the US tries to take a diplomatic route via negotiations, Iran's supreme leader, Ali Khamenei, said that the talks between the nations are unlikely to yield results.

“We don’t think it will lead to any outcome. We don’t know what will happen,” Khamenei reportedly said in a speech. He also said that rejecting Iran’s right to enrich uranium was “a big mistake”.

Meanwhile, the increased supply of WTI oil might bring the price levels down to as low as $40 per barrel, as per Bloomberg Intelligence.