Crude Prices Jump Over 6% After Israel Strikes Iranian Fuel Depots

Crude oil futures jumped over 6% Wednesday morning, with Brent crude reaching $98.40 per barrel and West Texas Intermediate (WTI) climbing to $93.15 amid reports of Israeli airstrikes on Iranian fuel depots in Isfahan and Bandar Abbas. The strikes, confirmed by intelligence sources, targeted large-scale storage infrastructure linked to Iran’s national fuel reserves and strategic distribution networks. The attack marks a significant escalation in regional hostilities, raising fears of a broader conflict between Israel and Iran. Iran's state-run oil entity, NIOC, has not publicly commented, but regional supply chain analysts warn of potential disruptions to exports and refining operations. The attack coincided with a spike in the CBOE Volatility Index (^VIX), which rose to 28.7—its highest level since November 2024—indicating heightened risk aversion among investors. The impact was immediate across commodities markets. United States Oil Fund (USO), a major oil ETF, rose 5.3% in early trading and is now up 18% since the start of the month. With Iran accounting for 2.7 million barrels per day in crude production and 2.1 million bpd in refined product exports, even temporary disruptions could tighten global supply. Analysts estimate that a week-long outage at the targeted depots could reduce regional supply by up to 400,000 bpd. Energy traders are now closely monitoring shipping routes through the Strait of Hormuz and potential retaliatory actions. The U.S. Department of Energy has activated emergency response protocols, while OPEC+ members are preparing for possible output adjustments. The situation remains fluid, with market participants bracing for further volatility.