DTN Oil Update

Karim Bastati
DTN Analyst

VIENNA (DTN) -- Oil futures surged more than 14% to a 4.5-month high Friday morning after Israel carried out a series of attacks on Iran. Iran's Supreme Leader Khamenei announced a "severe response."

NYMEX-traded WTI for July surged $5.99 barrel (bbl) to trade near $74.03 bbl, and ICE Brent for August delivery rocketed $5.88 bbl to $75.24 bbl.

July RBOB gasoline futures jumped $0.1038 to $2.2467 gallon, and the front-month ULSD futures contract advanced $0.1671 to trade near $2.3558 gallon.

The U.S. Dollar Index strengthened by 0.464 points to 98.365.

Aside from the threat to Iranian production and exports, the region, which produces a third of global crude supply, being dragged into a wider conflict poses risks to supply stability of Middle Eastern oil more broadly. In addition, Iranian retaliatory measures, either via its armed proxies or by direct action in the Persian Gulf, could remove millions of barrels per day from the market. The 2019 Houthi strike on Saudi Arabian oil facilities briefly shut in close to half of Saudi oil production, and the group has in the past repeatedly targeted oil tankers heading to the Suez Canal. An Iranian blockade of the Strait of Hormuz, a vital transit point for around 20 million barrels per day of oil and oil products right at its doorstep, would shut in more than a fifth of global oil supply.