US Strike on Iran: Oil Prices up by Barely 3% Despite Fears of Soar in Global Oil Prices

Oil prices were up by barely 3%, despite fears the U.S. military’s overnight strikes on Iranian nuclear facilities would send oil prices soaring. Brent crude was trading up 3.17% at $79.45 per barrel, while the U.S. crude benchmark, West Texas Intermediate (WTI) was trading up $3.18 at $76.19 per barrel in early New York trading on Sunday, showing a muted reaction to the escalating war in the Middle East.

Oil Prices Not Going According to Predictions

Previous incidents of this magnitude have triggered far sharper moves in crude markets, so it was expected that the US strikes on Iranian facilities would trigger a similar reaction.

The coordinated U.S. airstrikes hit Fordow, Natanz, and Isfahan overnight, inflicting visible damage on enrichment and research infrastructure. Tehran has promised retaliation, but so far, energy markets are betting that escalation remains limited.

When Iran-linked militants struck Saudi Aramco’s Abqaiq facility in September 2019, temporarily halting 5% of global oil output, Brent futures spiked nearly 20% in a single day, marking the largest one-day price jump in history. Similarly, following the U.S. drone strike on Qassem Soleimani in early 2020, prices surged a much more modest ~4% amid fears of regional retaliation.

Today’s tepid response highlights how much more insulated markets have become from geopolitical flashpoints. The surge in North American output has added millions of barrels per day to global supply, creating a cushion against potential supply shocks from conflict-prone regions like the Middle East.

Similarly, the growth of strategic petroleum reserves (SPRs) maintained by major consuming nations such as the U.S., China, India, and members of the International Energy Agency (IEA) have helped provide a buffer that can be tapped during crises to stabilize markets.

However, should Iran retaliate, analysts warn there could be a spike that pushes oil prices closer to $100 per barrel with Veteran analyst Tom Kloza saying on X that traders seemed to be “waiting to see if Iran disrupts Hormuz before lifting the gas price alarm.