Crude Oil Prices Jump as US-Israel Launch Strikes on Iran

YEREVAN (Azat TV) – Global crude oil prices experienced a sharp increase on Friday, February 27, 2026, following a wave of coordinated military strikes launched by the United States and Israel across Iran. The attacks, which targeted multiple Iranian cities, including the capital Tehran, represent a significant escalation in a regional conflict that has simmered for months, immediately introducing heightened volatility into international energy markets.

Israeli Defense Minister Israel Katz confirmed the operation as a ‘preemptive strike,’ while U.S. officials described it as ‘not a small strike,’ involving attack planes from regional bases and aircraft carriers. Explosions were reported in key Iranian cities such as Isfahan, Qom, and Karaj, with witnesses in Tehran observing thick smoke rising from districts housing government buildings. This dramatic development has prompted immediate concerns over potential disruptions to global oil supply, despite earlier analyses suggesting otherwise.

Immediate Market Reaction to Iran Strikes

The military action triggered an immediate and substantial jump in crude oil prices. The international benchmark, Brent crude, briefly surged above $73 per barrel before settling at $72.48, marking a 2.5 percent increase by Friday’s close. Similarly, West Texas Intermediate (WTI) crude saw a 2.8 percent rise, reaching $67.02 per barrel. Analysts attributed this rapid ascent primarily to escalating geopolitical risks and market positioning ahead of the weekend, as traders braced for potential further developments.

Rebecca Babin, a senior equity trader for CIBC Private Wealth in New York, told Rigzone that crude was ‘moving higher today on a combination of positioning and geopolitical risk heading into the weekend.’ Phil Flynn, a senior market analyst at the PRICE Futures Group, echoed this sentiment, noting that oil was up ‘on growing speculation that an attack on Iran’s nuclear infrastructure won’t be avoided.’ The market’s nervousness was palpable, with many anticipating increased volatility.

Escalation of Conflict in Iran

The coordinated U.S.-Israel strikes mark a critical juncture in the ongoing regional tensions. According to Oilprice.com, the attacks come amidst a period of extreme domestic instability within Iran, with human rights groups estimating over 5,000 protesters killed in a recent government crackdown. U.S. President Donald Trump reportedly cited both Iran’s nuclear program and the treatment of protesters as justifications for the assault. This is not the first U.S. strike on Iranian soil, with American warplanes having bombed three nuclear sites in June 2025; however, the current operation appears far more extensive.

In anticipation of potential infrastructure damage or stricter maritime blockades, Iranian authorities reportedly spent the days leading up to the attack rushing to export as much crude oil as possible. Satellite imagery and shipping data indicated an unusual surge in tanker activity at Iranian terminals throughout the week, as Tehran sought to maximize revenue and clear storage facilities. In response to the strikes, Israel closed its airspace, suspended all civilian flights, and its Home Front Command ordered the public to cease non-essential activities, prohibiting gatherings and closing schools.

Broader Oil Market Dynamics and Forecasts

The immediate price surge stands in stark contrast to a recent bearish outlook for Brent crude in 2026. Prior to the strikes, J.P. Morgan Global Research, in an analysis released on February 27, 2026, had projected Brent crude to average around $60 per barrel for the year. This forecast was underpinned by soft supply-demand fundamentals, with global oil supply expected to outpace demand, even with anticipated production cuts. Natasha Kaneva, head of Global Commodities Strategy at J.P. Morgan, noted that an ‘oil surplus was visible in January data and is likely to persist,’ suggesting that ‘voluntary and involuntary production cuts will be needed to prevent excessive inventory accumulation.’

However, J.P. Morgan’s analysis also acknowledged geopolitical risks as a ‘wild card’ that could vastly impact oil supply and demand, fueling price volatility. While Kaneva had previously stated that protracted oil supply disruptions were unlikely if military action against Iran occurred, expecting it to be targeted away from oil production and export infrastructure, the scale of the current strikes introduces new uncertainties. The firm had also highlighted that ‘regime changes in oil-producing countries’ could lead to substantial spikes in oil prices, citing historical instances where prices averaged a 76 percent increase from onset to peak.

Global Trade Flow Shifts and Sanctions

Beyond the immediate geopolitical crisis, global oil markets continue to adapt to ongoing shifts in trade flows, particularly due to sanctions on Russian oil. J.P. Morgan Global Research indicated that nearly 70 percent of Russian crude is now subject to restrictions, leading to a redirection of barrels. India, under pressure from U.S. tariffs, has scaled back its intake of Russian oil, with flows primarily being redirected toward China. Russian crude imports into China have risen by 0.5 million barrels per day, largely absorbed by independent refiners and storage facilities offering flexibility for discounted barrels.

Despite India’s partial pullback, J.P. Morgan still expects the nation to maintain Russian imports at around 0.8 to 1.0 million barrels per day, owing to the attractive pricing of Russian Urals crude compared to alternatives. The easing of U.S. sanctions on Venezuelan oil has allowed its return to India, but volumes are insufficient to fully replace Russian crude. These dynamics suggest that while Russian exports remain resilient, they are sustained at higher discounts and with increased logistical complexity, reinforcing an existing market trend rather than fundamentally altering overall supply.

The immediate surge in crude oil prices following the U.S.-Israel strikes on Iran underscores the profound and immediate impact of geopolitical events on global energy markets, overshadowing earlier fundamental projections for a bearish 2026. While long-term supply-demand dynamics may still exert downward pressure, the current escalation demonstrates that geopolitical risks remain the most potent short-term driver of price volatility, with potential for sustained disruption depending on the conflict’s trajectory.