Oil prices jump on escalating crises in Middle East

Oil prices jumped on Friday while Asian markets tumbled, with global investors worrying about an escalation in conflict in the Middle East after explosions were reported near the Iranian city of Isfahan.

US crude futures rose 2.1% to trade at $84.5 per barrel during Asian morning trading hours. Brent crude, the global oil benchmark, was up 2%.

Israel has carried out a strike inside Iran, a US official told CNN, a move that threatens to push the region deeper into conflict.

The Israeli military said they “don’t have a comment at this time,” when asked by CNN about reports of explosions in Iran.

On Thursday, Prime Minister Benjamin Netanyahu said Israel will “make its own decisions” when responding to Iran’s unprecedented weekend airstrikes, most of which were intercepted.

Iran launched the attack in retaliation for a suspected Israeli strike on its embassy compound in Syria earlier this month.

“The market has been on edge since Iran launched a missile and drone attack on the Jewish state over the weekend,” said analysts from ANZ on Friday.

“Israel’s response could determine whether oil supplies are ultimately under threat.”

Elsewhere, ongoing oil disruptions remain high, the analysts added.

The United States has announced that it would reinstate sanctions on Venezuela’s oil industry, which could disrupt its exports.

Mexico also said earlier this month that it would cut back exports because of strong domestic demand.

Gold prices jumped higher as traders rushed to safe-haven assets, with futures briefly up 1% to trade at $2,422.4 per ounce during Asian hours.

The price of bitcoin, meanwhile, dropped below $60,000 on Friday morning, as appetite for risk assets waned.

It pared some of those losses by Friday noon to trade at $62,406, but was still down 2% from the previous session.

Japan’s Nikkei 225 slid 2.6%. South Korea’s Kospi lost 2.3%. Hong Kong’s Hang Seng Index fell 1.3%. China’s Shanghai Composite was down 0.4%.

But shares in oil suppliers surged, bucking the weak market trend.

In Hong Kong, PetroChina, Asia’s largest oil and gas supplier, advanced 2.3%.

CNOOC, China’s largest producer of offshore crude, climbed 2.8%. Sinopec, the world’s largest oil refining company by capacity, rose 1.3%.

In Tokyo, refiner Cosmo Energy was up 1.5%. Energy giant Eneos Corp. added 0.7%. In Seoul, S-Oil Corp rose 2.1%.