Oil Markets Jitter as Iran Escalates Strike Response

Iran has launched a new wave of missile and drone strikes against Israel, following U.S. airstrikes that obliterated key Iranian nuclear facilities under Operation Midnight Hammer. The ripple effects are already being felt in global oil markets, while diplomatic channels strain under mounting pressure.

The bombardment hit Israeli cities including Tel Aviv and Ashdod, with satellite monitoring confirming sirens and intercepted projectiles. Iran disclosed the deployment of dozens of drone strikes featuring anti-fortification warheads, claiming successful strikes on military installations. Iran’s armed forces spokesperson warned U.S. President Trump—whom he labelled a “gambler”—that Tehran intends to finish the war it believes Washington started.

U.S. involvement under the codename Operation Midnight Hammer saw bunker-buster bombs and Tomahawk missiles strike Fordow, Natanz and Isfahan around 2:30am Iran Standard Time on 22 June. President Trump hailed the strikes as a “spectacular success” and hinted at possible regime change even as officials insisted the goal was solely the elimination of Iran’s nuclear threat.

State media reports have confirmed Israeli attacks across multiple fronts—targeting runways, missile depots, and even Tehran’s Evin Prison—with hundreds of Iranian casualties reported, primarily civilians. Iran, in turn, acknowledges missile strikes that killed at least 24 civilians in Israel, though tensions have yet to directly involve U.S. military assets.

Markets are acutely rattled. Brent crude briefly climbed over $80 a barrel before settling around $76.6, reflecting investor anxiety over potential closures of the Strait of Hormuz—through which nearly a fifth of global oil transits. Iran’s parliament approved a measure to block the strait, though practical implementation requires Supreme National Security Council approval. Experts warn closure could send prices soaring beyond $100, risking a global economic downturn.

Diplomatic initiatives are mounting but yielding little success. Iran’s Foreign Minister Abbas Araghchi travelled to Moscow to discuss coordination with Russia, while the UN Security Council and IAEA held emergency sessions to assess fallout and potential regional contamination. European leaders, including those in Brussels, are urging restraint, though unity remains elusive.

On the military front, analysis of commercial imagery indicates substantial damage at Fordow—deep underground—though Iran maintains that much of its nuclear material had been removed beforehand. Experts suggest Iran’s retaliatory capacity may be limited due to depleted missile reserves and weakened regional proxies like Hezbollah and the Assad regime. Yet, threats to withdraw from the Nuclear Non‑Proliferation Treaty and ramp up nuclear weaponisation are being voiced by hardliners.

U.S. authorities have raised global alerts: the State Department issued a “Worldwide Caution” travel advisory, and the Department of Homeland Security flagged potential cyberattacks from pro-Iranian actors. U.S. cities have boosted security around cultural and diplomatic sites amid fears of retaliation.

Oil traders also show signs of hedging—gold and Swiss franc investments are up, mirroring a flight to safe havens seen in June’s earlier Israeli‑Iran exchanges.

Tehran has warned no diplomatic efforts will resume until payback is achieved. Meanwhile, Washington and its allies are weighing strategic options, including naval deployments to secure oil flows and counter threats in the Gulf. The situation remains volatile, with escalation possible at any moment.