Oil prices surged after US struck Iranian nuclear sites, but retreated later due to tensions

From Yahoo Finance.: 2025-06-23 13:05:00

Oil prices surged in Asia after the US struck Iran’s nuclear facilities on Sunday, reaching a five-month high. Tensions rose as Iran threatened to block the Strait of Hormuz, a key oil passage. Goldman Sachs warned of potential price spikes if Iranian supply drops significantly. US benchmark West Texas Intermediate rose 6.2% before falling. International benchmark Brent crude oil futures gained 5.7% before reversing gains.

Markets have been on edge since Israel struck Iran on June 12, fearing oil supply disruptions. The Strait of Hormuz, a vital oil and gas shipping passage, is at risk. Crude oil futures have gained 10% since the conflict began, with a $12 geopolitical risk premium. Goldman Sachs analysts estimate Brent oil prices could rise to $90 a barrel if Iranian supply drops.

Iranian parliament voted to close the Strait of Hormuz in retaliation against the US. The developments come during the summer driving season, with US gas demand at its peak. Pump prices are likely to rise if oil price gains are sustained, as gas prices typically increase by 2.4 cents per gallon for every $1 rise in crude oil prices.

Read more: Oil prices retreat from 5-month high after the US struck Iranian nuclear sites