US Iran Strike Drives Oil Prices Up, Risks Global Impact

Recent geopolitical tensions in the Middle East, notably the Israeli strike on Iranian nuclear facilities followed by Iran's retaliation, initially caused a sharp rise in oil prices due to fears of supply disruptions and broader regional conflict. Brent crude surged from around $66.80 to $75.48, reflecting a significant geopolitical risk premium, but prices later dropped as the market reassessed the actual impact. The ongoing instability has pushed Brent crude near $80 per barrel and WTI close to $75.98, raising concerns about further price spikes if critical shipping lanes like the Strait of Hormuz are blocked. These developments have serious global economic implications, particularly for oil-importing countries like Pakistan, where sustained high prices could worsen the current account deficit and fuel inflation. The market's reaction suggests a complex interplay between immediate geopolitical fears and longer-term supply fundamentals, causing unpredictable price movements. This dynamic underscores how geopolitics does not always translate straightforwardly into sustained oil price surges, reflecting both speculative and fundamental market factors.