Oil Prices Could Soar to $130 Amid Escalating Middle East Tensions, JPMorgan Warns

 

Global oil prices have surged to a four-year high following Israel's airstrikes on Iranian nuclear facilities, prompting warnings from JPMorgan that crude could hit $130 a barrel if the conflict intensifies dramatically.

 

The escalating geopolitical tensions have rattled energy markets, with fears growing of potential Iranian retaliation targeting U.S. and Israeli interests.

 

The unbacked Israeli air assault on Iran led to a significant spike in crude oil futures, with prices jumping by as much as 13%.

 

West Texas Intermediate (WTI), the U.S. benchmark, saw a 9.66% increase, reaching $74.64 per barrel, while Brent crude, the international benchmark, surged by 9.27% to $75.79 per barrel.

 

This marks the largest single-day gain for Brent since 2020.

 

Israeli Prime Minister Benjamin Netanyahu confirmed that Israel had commenced "specific military operations" targeting Iran's nuclear missile programme.

 

Key sites attacked reportedly include the primary uranium enrichment facility at Natanz, a hub for Iran's leading nuclear scientists, and the country's missile programme centre.

 

"This operation will continue as long as the threat persists," Israel declared, following its strikes on Iranian nuclear and missile objectives.

 

Conversely, U.S. Secretary of State Marco Rubio confirmed that Israel acted "alone," without any support from the U.S. government. He issued a stern warning to Iran against attacking U.S. interests in the region. 

 

"We were not involved in the attack on Iran, and our paramount concern is protecting U.S. forces in this region," Rubio stated. "Israel informed us they believe this action was necessary for their self-defence."
 

 

As Israel braces for potential retaliation, the country's Defence Minister has declared a special nationwide state of emergency in anticipation of possible Iranian missile or drone counter-attacks.

 

State-affiliated Iranian media, meanwhile, reported that General Hossein Salami, the Commander-in-Chief of the Islamic Revolutionary Guard Corps, was killed in the Israeli offensive.

 

This heightened instability has sparked concerns within the oil market that Iran might retaliate by targeting Israeli or U.S. assets, which could trigger a larger military confrontation and severely impact global oil supply.

 

Andy Lipow, president of energy consulting firm Lipow Oil Associates, highlighted that "Iran knows President Donald Trump prioritises low energy prices." 

 

He suggested that any Iranian attacks on Middle Eastern oil facilities leading to soaring U.S. petrol and diesel prices could inevitably have detrimental political consequences for Trump.

 

Saul Kavonic, head of energy research at MST Marquee, added that while the oil market has often overlooked geopolitical risks, the latest developments serve as a "wake-up call" that these risks may be more immediate and severe than previously understood.

 

"This attack will undoubtedly lead to some form of retaliation, which could easily escalate, even if unintentionally," Kavonic warned, suggesting that the event might further embolden hardliners in Iran to pursue a confrontational path and escalate the conflict.
 

 

 

Despite the intensifying geopolitical friction between Iran, the U.S., and Israel, JPMorgan Bank maintains its 2025 Brent crude oil price forecast in the "low to mid $60s per barrel" range. 

 

However, in a report released on Thursday, the bank cautioned that in an extreme worst-case scenario – such as a full-scale military conflict or the closure of the Strait of Hormuz, a critical waterway for over 20% of the world's oil – prices could skyrocket to $120–$130 per barrel.

 

Back in Thailand, Asia Plus Securities indicated that the rising global crude oil prices pose a risk of fuelling inflation in the near term, potentially hindering the current trend of falling interest rates and creating a negative sentiment for the SET Index.

 

However, the energy and refinery sectors, which hold a significant weighting of up to one-third of the total market, are expected to provide support. Stocks that benefit from surging crude oil prices and are still lagging, despite oil's 1.45% year-to-date increase, include PTTEP, PTT, BCP, and PTTGC.