Oil prices surged following heightened tensions in the Middle East

Oil prices surged following heightened tensions in the Middle East

Oil prices surged on Friday while Asian markets fell, with global investors worried about an escalation of conflict in the Middle East after an explosion was reported near the Iranian city of Isfahan.

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

Israel has launched an attack inside Iran, a US official told CNN, a move that threatens to push the region deeper into the conflict. The Israeli military said they “have no comment at this time,” when asked by CNN about reports of explosions in Iran.

On Thursday, Prime Minister Benjamin Netanyahu said Israel would make “its own decision” when responding to Iran’s unprecedented airstrikes, most of which have been intercepted. Iran launched the attack in retaliation for a suspected Israeli attack on its embassy compound in Syria earlier this month.

“Markets have been increasingly threatened since Iran launched missile and drone attacks on the Jewish state over the weekend,” analysts from ANZ said on Friday. “Israel’s response could determine whether oil supplies are ultimately threatened.”

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

The United States has announced that it will reinstate sanctions on Venezuela’s oil industry, which could disrupt its exports. Mexico also said earlier this month that it would cut exports because of strong domestic demand.

Gold prices surged higher as traders rushed to the safe-haven asset, with futures briefly up 1% to trade at $2,422.4 an ounce in Asian time.

The price of bitcoin, meanwhile, fell below $60,000 on Friday morning, as appetite for the risky asset waned. It pared some of those losses by midday Friday to trade at $62,406, but was still down 2% from the previous session.

Stock markets in Asia also declined.

Japan’s Nikkei 225 declined 2.6%. South Korea’s Kospi lost 2.3%. Hong Kong’s Hang Seng index fell 1.3%. China’s Shanghai Composite fell 0.4%.

But shares in the oil supplier surged, bucking weak market trends.

In Hong Kong, PetroChina, Asia’s largest oil and gas supplier, rose 2.3%. CNOOC, China’s largest offshore crude oil producer, rose 2.8%. Sinopec, the world’s largest oil refiner by capacity, rose 1.3%.

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