The oil market has been wrestling for days with Donald Trumps next act in an escalating Middle East conflict. Now American jets have struck Irans three main nuclear sites, a move that leaves traders preparing for a price surge but still guessing where the crisis goes from here.
In a wild week, Brent futures have jumped 11 since Israel attacked its nemesis, but with sharp moves up and down from one day to the next. That rise is expected to restart on Monday, after the US assault which targeted sites at Fordow, Natanz, and Esfahan - dramatically raised the stakes in a region that accounts for a third of global oil output.
From frenzied options markets, to soaring freight and diesel pricing, to a radical redrawing of crudes pivotal forward curve, all of that volatility is expected to intensify in the week ahead.
Much depends on how Iran responds in the coming hours and days but this could set us on a path toward 100 oil, if Iran responds as they have previously threatened to, said Saul Kavonic, an energy analyst at MST Marquee. This US attack could see a conflagration of the conflict to include Iran responding by targeting regional American interests that include Gulf oil infrastructure in places such as Iraq, or harassing passage through the Strait of Hormuz.
