Crude Prices Jump 8% After Israel Strikes Iranian Fuel Depots

Global crude markets reacted sharply to a military escalation in the Middle East, as Israel conducted precision strikes on Iranian fuel depots in Isfahan and Bandar Abbas. The attack, confirmed by multiple regional intelligence sources, targeted infrastructure critical to Iran’s domestic fuel distribution and regional exports, raising fears of supply disruptions in a region already strained by ongoing geopolitical volatility. The immediate impact was evident in energy markets: Brent crude futures (CL=F) climbed to $98.40 per barrel, marking an 8.2% gain in early trading and the largest single-day increase since late 2023. The surge reflects market anxiety over potential long-term supply constraints, particularly given Iran’s role as a key exporter in the Persian Gulf and its capacity to influence regional refining margins. Energy companies such as Exxon Mobil (XOM) saw their shares rise 3.1% on the news, benefiting from higher oil prices despite broader macroeconomic headwinds. Volatility also spiked, with the CBOE Volatility Index (^VIX) jumping from 16.3 to 19.9, signaling heightened investor unease. Analysts noted that if the conflict spreads or Iran retaliates against energy infrastructure, crude could test $105 per barrel in a worst-case scenario. The energy sector, including midstream and refining firms, is now reassessing risk exposure, particularly those with operations or logistics tied to the Strait of Hormuz. The defense sector also saw early activity, with defense contractors linked to missile defense systems and surveillance platforms experiencing modest gains. However, the broader economic implications remain uncertain, as supply shocks could fuel inflationary pressures and prompt central banks to reconsider rate-cut timelines.