Crude oil futures surge over 11% to 4-month high after Israel launches missiles against Iran

Crude oil futures in Friday's trade (June 13, 2025) rose sharply higher amid escalating Israel and Iran conflict with the Israel launching airstrikes against Iran. US West Texas Intermediate last rose, 11.36 per cent to $75.77 per barrel, while global benchmark Brent surged 11.04 per cent, to $77.02 per barrel

Israel launched a “targeted military operation” against Iran’s nuclear as well as ballistic missile, said Israel Prime Minister Benjamin Netanyahu  in an address. 

The minister added that Israel hit Iran’s main enrichment site at Natanz, its leading nuclear scientists, and struck the heart of its ballistic missile program, he added.

Further in a video message, Netanyahu declared a state of emergency and said the operation called as 'Rising Lion' would be continued for as long as it takes to remove 'Iran's threat to Israel's survival'.

“This operation will continue for as many days as it takes to remove this threat,” he noted.

Meanwhile, the US Secretary of State Marco Rubio in a statement stated that US is not engaged in the strikes against Iran. However, he added that Israel told the action was required for its self-defence.

How oil markets see the sharp spike in crude prices?

Oil markets, now, foresee the likely retailation from Iran that will attack Israel or US targets, resulting in a possible military escalation and hence a potential supply disruption in the commodity.

Impact on Indian oil companies

For downstream oil company like ONGC, the rise in crude price is a positive news, while for upstream majors it is a negative news. In fact on the gains in the commodity, ONGC emerged as the only Nifty50 gainers with gains of 1 per cent as at the last count at Rs 250 per share.

Expert view

Madhavi Arora, Lead Economist, Emkay Global Financial Services said, "We have $70/bbl brent assumption for FY26 with Q1FY26 likely to average at $67-69/bbl". 

With OPEC+ announcing another higher than expected production hike in July, *fundamentally oil markets remain well supplied* and further Iranian supply cuts can be accommodated.

As of now, we are 'not changing our forecasts' and continue to see 'CPI inflation undershooting RBI’s estimate of 3.7 per cent to average much lower 3.3-3.4%' in FY26. We note every $10/bl increase in oil leads to annualised gain of 35 bps in CPI inflation, she added.

Energy team maintains a 'positive view on OMCs' on the back of strong marketing margins and core GRMs also holding up and up to $75/bbl Brent for remaining part of year our estimates don’t see downside risks