Crude oil futures rose on reports that Israel is preparing for a direct attack by Iran this weekend, with the West Texas Intermediate contract for May delivery hitting $87.67 and June Brent futures reaching $92.18. As a result, U.S. crude gained 64 cents to settle at $85.66 per barrel, while the global benchmark settled at $90.45 per barrel. Exxon Mobil stock also hit an all-time high of $123.74 as the energy sector benefitted from the oil rally.
It has been reported that Israel is bracing for a potential attack by Iran on either southern or northern Israel as soon as Friday or Saturday. While discussions are ongoing, no final decision has been made by Iran, according to individuals familiar with the situation. Western intelligence assessments suggest that an attack with drones and missiles could come within the next 48 hours, potentially complicating the already tense situation in the region.
In light of these developments, the U.S. embassy in Jerusalem has issued restrictions on personal travel for government employees and their families as a precautionary measure. This follows a promise by Iran’s Supreme Leader Ayatollah Ali Khamenei to retaliate against Israel for an attack on an Iranian diplomatic building in Damascus, Syria, which resulted in the deaths of seven military officials. Oil prices initially rallied following the attack, with concerns about inflation data and U.S. crude stockpiles subsequently affecting market sentiment.
Israel has warned Iran that it will respond if Tehran launches an attack on Israeli territory. Foreign Minister Israel Katz stated on social media that Israel would retaliate against Iran if attacked, tagging Khamenei in the post. Analysts have suggested that Brent crude oil futures could spike to $100 a barrel if Iran directly targets Israel, with the possibility of prices reaching $120-130 per barrel if there is a disruption in the critical trade route of the Strait of Hormuz. Bob McNally, president of Rapidan Energy, emphasized the potentially significant impact of an escalation in tensions on global oil markets.
