Oil price trends are worrying, and the market faces multiple challenges.

The Trigger for the Escalation of the Conflict: Israel's Airstrikes on Iran's Nuclear and Energy Facilities

Israel's Harsh Stance

On 13 June (Friday), the Israeli military launched a large-scale airstrike targeting Iran's nuclear weapons research facilities and ballistic missile bases. Israel claimed the action aimed to completely eliminate Iran's nuclear threat and prevent further development of its nuclear capabilities. To minimise civilian casualties, the Israeli military issued advance warnings for Iranian residents to evacuate areas near the facilities. However, this operation did not entirely prevent civilian casualties. Fighting continued throughout the weekend. On the morning of 16 June (Monday), the Israeli Air Force launched another strike, precisely targeting a ground-to-ground missile base in central Iran, further escalating tensions.

The Blazing Crisis at Oil Facilities

What has drawn even more global attention is that Israel has expanded its targets to include Iran's oil and natural gas sectors. In the night sky over Tehran, fuel depots were destroyed by explosions, igniting massive fires whose flames reached the heavens, symbolising a severe blow to the lifeblood of Iran's economy. As the core pillars of Iran's national operations, this attack not only threatens domestic energy supplies but has also triggered significant fluctuations in global oil prices. Concerns over energy shortages in international markets have swiftly driven up oil prices, leaving the global economy facing new uncertainties. There are also concerns that exports through the Strait of Hormuz may face disruption risks.

On Monday (16 June), US crude oil prices surged by 6% to $77.49 per barrel at the start of trading, but have since fallen back to $73.45 per barrel. Brent crude oil is currently up 0.19%, trading around $74.73 per barrel.

Iran's Strong Response: Missile Attacks on Israeli Territory

Day and Night Attacks

In response to Israel's offensive, Iran swiftly launched a counterattack. On 15 June (Saturday), Iran fired missiles at Tel Aviv, Israel, for the first time during daytime, with explosions echoing across the city, resulting in at least 10 deaths, including innocent children. Just a few hours later, as night fell, Iran launched a second wave of missile attacks, targeting the Jewish-Arab mixed city of Haifa in northern Israel. A residential street was directly hit by a missile, injuring nine people, while two others were injured in attacks in the southern region. The Iranian military simultaneously issued a warning, urging Israeli residents to evacuate ‘critical areas’ to ensure safety, highlighting the intense psychological and military confrontation between the two sides.

The Tragic Toll on Civilians

The escalation of the conflict has exacted a heavy toll on civilians on both sides. Hossein Kermanpour, spokesperson for the Iranian Ministry of Health, revealed that since the Israeli airstrikes began, 224 people have been killed in Iran, with over 1,200 injured, 90% of whom are civilians. A 14-storey apartment building in Tehran was reduced to rubble, resulting in the deaths of 60 people, half of whom were children. Similarly, Israeli residents are living in fear. Explosions in Tel Aviv and Haifa have kept people awake all night. Resident Shem, standing before the ruins in Bat Yam, said helplessly, ‘This is terrifying; people are losing their lives and homes.’ The shadow of war looms over both sides, with innocent civilians bearing the brunt of the suffering.

The International Community's Anxiety and Mediation Efforts

The G7 Emergency Meeting

Faced with the rapidly deteriorating situation, the international community has taken urgent action. German Chancellor Friedrich Merz stated that he hopes countries can reach an agreement at the G7 leaders' meeting scheduled for 15 June in Canada to jointly promote conflict de-escalation and prevent further escalation of hostilities. However, the prospects for mediation are not optimistic. Iran has explicitly informed mediating countries such as Qatar and Oman that, under Israel's ongoing attacks, Iran refuses to engage in ceasefire negotiations with the United States. This has forced the cancellation of the originally scheduled Iran nuclear issue talks on Sunday, blocking diplomatic channels.

Trump's Delicate Role

In the United States, President Trump's decisions have added more uncertainty to the crisis. According to two US officials, Trump recently rejected Israel's plan to assassinate Iran's supreme leader Ayatollah Ali Khamenei. This decision has sparked widespread speculation. Israeli Prime Minister Benjamin Netanyahu, in an interview with Fox News, was vague about the reports, stating only that ‘there are many false reports’ and emphasising that Israel will continue to take necessary actions. Trump, en route to the G7 summit, told reporters that he hopes both sides can reach a ceasefire, but also noted that ‘sometimes countries must first engage in conflict.’ This statement reflects the United States' complex position in the conflict, unwilling to fully intervene yet seeking to maintain influence.