The Middle East conflict has taken a dramatic turn, with Israel launching strikes on Iranian nuclear and military sites, prompting fears of a full-blown war. The attacks have sent oil prices surging, with both main oil contracts spiking over 12% amid concerns about supply disruptions. Israeli Prime Minister Benjamin Netanyahu stated that the operation would continue “for as many days as it takes to remove this threat,” targeting Iran’s nuclear enrichment program and ballistic missile facilities.
Netanyahu added that nuclear scientists “working on the Iranian bomb” had also been hit. Army officials warned that Iran was approaching the “point of no return” on its atomic program and could obtain a nuclear weapon in a “short period of time”. In response, Iran’s Supreme Leader Ayatollah Ali Khamenei warned Israel of severe consequences, saying, “With this crime, the Zionist regime has set itself for a bitter and painful fate and it will definitely receive it”.
The strikes have had a significant impact on global markets, with equity markets across Asia and Europe tumbling and bonds rallying with gold, which surged above $3,400 an ounce. US futures were deep in the red. Stephen Innes at SPI Asset Management noted, “The Middle East powder keg just blew the lid off global markets. Equity futures are plummeting. Bond yields are sinking. Gold and oil are skyrocketing”. He added that Brent crude futures could reach the mid-$70s range, with potential for further increases if the Strait of Hormuz is affected.
The US has denied involvement in the operation, but Iran’s foreign ministry said the United States would be “responsible for the consequences” of the attacks, adding that they “cannot have been carried out without the coordination and permission” of Washington. This development has raised concerns about potential US involvement and the possibility of drawing the US into the crisis.