Tensions Spark Volatility
On June 22, 2025, U.S. forces launched Operation Midnight Hammer, bombing three Iranian nuclear sites—Natanz, Fordow, and Isfahan—marking a major escalation in Middle East tensions. According to The New York Times and Bloomberg, this triggered sharp movements in global markets and renewed concerns over energy supply security.
Strait of Hormuz and Oil Supply
The Strait of Hormuz is responsible for approximately 20% of global oil shipments, making it one of the world’s most critical chokepoints. Iran’s parliament voted on June 22 to close the strait in response to U.S. strikes, although full closure remains unlikely, according to CNN and Bloomberg.
Oil traders and shipping companies are already assessing alternative routes, with some tankers diverting to safer waters. According to CNN, Iran has historically used mines, missiles, and fast-attack boats to control this area, raising legitimate concerns about maritime security.
Analysts suggest that a prolonged disruption could push oil prices toward $150 per barrel and significantly increase global fuel costs, as noted by Bloomberg and Business Insider.
Surge and Stabilisation
Oil prices jumped sharply following the strikes. Brent crude briefly surged to around $81.40 per barrel—a five-month high—while WTI gained approximately 6.2% on the news. However, prices later stabilised at around the $73- 75 range. According to Goldman Sachs and reported by Business Insider, the conflict has introduced a geopolitical premium of about $12 per barrel.
At the same time,stock markets, particularly in Asia and Australia, experienced pullbacks. The Hang Seng index dropped amid rising tensions, and the ASX 200 lost nearly $25 billion in value on June 23. These market reactions were reported by The Times of India and News.com.au.
Safe-haven assets such as U.S. Treasuries and the U.S. dollar strengthened as investors reduced exposure to riskier markets, according to The Guardian and The New York Times.
Escalation, Volatility & Leverage
There is ongoing uncertainty about whether Iran will escalate its response or whether supply chains through the Strait of Hormuz will face direct disruption. According to The Guardian, the International Monetary Fund (IMF) has warned that continued conflict may present broader risks to the global economy.
Volatility remains elevated, and oil markets are highly sensitive to further geopolitical updates. According to analysts at RBC and Jefferies, fast price swings, slippage, and sudden reversals are likely in these conditions. Traders using leverage should be aware that potential gains can be amplified, but so can potential losses, especially during high-impact geopolitical events.
Summary: Key Takeaways on Oil and Geopolitical Tensions
- Oil spiked following the U.S. bombings, but partial retracements followed as the immediate supply was not affected.
- Strait of Hormuz threats added upward price pressure, though a full closure is not currently expected.
- Stock markets, particularly in Asia and Australia, retreated, and safe-haven assets saw renewed interest.
- Volatility, slippage, and leverage risks remain elevated in this fast-moving environment.
According to The New York Times, CNN, and Bloomberg, the situation remains fluid, with oil markets balancing between geopolitical risk premiums and the actual stability of supply chains.
