Traders got hit with a geopolitical haymaker Thursday night.
Crude oil surged over 9%, marking its biggest single-day move in nearly five years after Israel launched a surprise military operation targeting Iran’s nuclear and missile infrastructure. The West Texas Intermediate (WTI) crude ripped higher to $74.64, while Brent soared to $75.79 per barrel. That’s not just a pop, that’s a warning flare to every energy trader on the planet.
So, what exactly happened? And how much of this rally is panic, premium, or something more lasting?
Here’s what you should know:
1. The Strike Heard Around the Markets
‼️‼️‼️ “We struck at the heart of Iran’s nuclear enrichment program and its efforts to acquire nuclear weapons — we hit Iran’s main enrichment facility in Natanz.
We also targeted Iran’s leading nuclear scientists, those working on bomb development, and who formed the core of
— #Visioner (#@visionergeo)
4:36 AM • Jun 13, 2025
Israeli Prime Minister Benjamin Netanyahu confirmed the military operation, stating that it targeted Iran’s Natanz enrichment facility, key nuclear scientists, and ballistic missile assets. His message was clear: "This operation will continue for as many days as it takes to remove this threat."
This wasn’t a symbolic move, it was direct, targeted, and far-reaching. Markets responded accordingly.
2. No U.S. Backing, But Plenty of Fallout
U.S. Secretary of State Marco Rubio made it clear: the U.S. had no hand in the strikes. "Our top priority is protecting American forces in the region," he said. Still, the optics are messy. Iran might not split hairs when retaliating.
Israel has since declared a special state of emergency. Tensions are sky-high as Iran weighs its next move. Iranian media reported the death of IRGC Commander Hossein Salami in the strikes, an escalation flashpoint if confirmed.
3. What Traders Are Pricing In Now
The oil rally isn’t just about the damage done. It’s about the risk of what’s coming next. As Andy Lipow of Lipow Oil Associates puts it, any retaliation from Iran targeting U.S. or Israeli interests could lead to a supply shock. And in a tight oil market, even a small disruption sends prices vertical.
Iran’s position in the Strait of Hormuz, through which about 20% of global oil passes, makes this more than a Middle Eastern conflict. It's a global energy security threat.
4. The Political Undercurrent
Here’s where it gets tricky. Trump’s administration has been riding the narrative of low fuel prices as a political win. An oil price surge is bad optics in an election year. If Iran retaliates and energy prices spiral, that political pressure could weigh on future U.S. actions, or lack thereof.
As Lipow bluntly put it: "Iran knows full well that President Donald Trump is focused on lower energy prices."
5. This Isn’t Just Noise, It’s a Shift
Markets have been lulled into ignoring geopolitical risk. But this move by Israel, and the potential retaliatory dominoes it could trigger, just re-priced the risk premium overnight.
Saul Kavonic from MST Marquee summed it up best: this is a "wake-up call." The possibility of escalation is real. If Iran hits back and the U.S. gets pulled in, we’re no longer talking about sentiment moves,we’re talking about structural shocks.
Here’s the takeaway
This isn’t your typical headline-driven pump and dump. The oil spike is grounded in real, developing risk. Us traders should keep eyes locked on Middle East headlines and watch volume for signs of real positioning.
In this kind of market, optionality beats prediction. Manage exposure, hedge with intent, and remember: it only takes one spark to ignite a breakout.
