Oil prices surging as Iran conflict enters second week

A new round of Israeli pre-dawn missel strikes rocked Iranian cities and Iran struck back against Israeli targets and the Israel- and U.S.-led military action against Iran entered its second week.

But the most widely felt impact may come from oil prices.

Crude oil futures topped $90 per barrel and were up 36 percent since Israeli and U.S. planes bombed Tehran and killed the country’s supreme leader, Ayatollah Ali Khamenei. Since then, Iran has nearly blocked maritime traffic through the Strait of Hormuz, which normally sees around a fifth of the world’s oil pass through it.

The last time oil prices were at this level was in 2022 after the start of the war between Russia and Ukraine, when prices reached as high as $125 per barrel. But oil prices have not been as volatile since 2020, during the period of global lockdowns connected to the coronavirus pandemic. 

Goldman Sachs warned that oil could surge above $100 per barrel in the coming days, a level economists say could create the conditions for recessions in many countries. 

President Donald Trump on Friday reiterated his statement that the conflict could only end with the Iran’s “unconditional surrender.”