Blitz Bureau
NEW DELHI: Global oil prices jumped on Monday as tensions in the Middle East flared up following reports that Israel had launched an attack on Iran’s massive South Pars gas field. The strike reportedly forced a shutdown at one of the field’s production platforms, raising fresh concerns over regional stability and the safety of energy infrastructure.
Brent crude surged as much as 5.5% in early trading before giving up most of those gains to hover around $75 a barrel.
Market analysts say a broader price rally is unlikely unless the conflict threatens key supply routes, particularly the Strait of Hormuz, or if Iran-backed Houthi rebels in Yemen begin targeting commercial shipping.
“Oil prices tend to act as a thermometer for geopolitical risk, and we’re seeing that now,” said Norbert Rucker, Head of Economics and Next Generation Research at Julius Baer. “While the current escalation has driven prices higher, we expect the impact to be short-lived unless the situation worsens significantly.”
Rucker added that oil markets have shown strong resilience to regional shocks in recent years. “Historically, these types of conflicts push prices up temporarily—typically by less than 20 percent—and the effect tends to fade within a few months, depending on how far the crisis spreads.”
The Israeli strike comes amid the collapse of nuclear deal talks between the United States and Iran. Tehran has warned that any attack on its territory would provoke retaliation against U.S. military bases in Iraq and neighboring countries. In response, Washington has begun withdrawing some of its personnel from the region.
Iran currently produces around 3.3 million barrels of crude oil per day—roughly 3 percent of global output—and exports about 1.5 million barrels daily. China is its primary buyer, followed by Turkey.
Its location on the northern edge of the Strait of Hormuz gives Iran significant leverage over a crucial maritime passage through which more than 20 million barrels of oil pass daily. Saudi Arabia, the UAE, and other Gulf producers also rely heavily on this route.
Any wider escalation that disrupts oil flows from major producers like Saudi Arabia, Iraq, Kuwait, or the UAE could send global oil prices sharply higher, analysts warn.