tensions in the Middle East have escalated as Israel launched airstrikes on Iran on Friday, raising concerns about a potential new war. The strikes come amidst ongoing disagreements over Tehran‘s atomic program.

Local media reported explosions in Tehran. Iran had previously warned of retaliation for any attack.

Israeli Defense Minister Israel Katz announced a special state of emergency, citing Israel’s “preemptive strike against Iran.” According to Katz, Israel is bracing for a retaliatory drone and missile attack.

Reuters

The timing of the attack coincides with renewed doubts surrounding diplomatic efforts to de-escalate tensions related to Iran’s atomic program. While U.S.and Iranian negotiators are scheduled to meet in Oman on Sunday for a sixth round of talks, U.S. President Donald Trump recently expressed diminished confidence in reaching an agreement.

Market Reactions to the Airstrikes

“preemptive strike against Iran”

News of the airstrikes triggered a surge in oil prices. Brent crude increased by as much as 5.7%, exceeding $73 a barrel, and West Texas Intermediate also experienced a notable rise.

Ongoing Conflict in Gaza

This latest growth occurs as Israel continues its military operation in Gaza, which has involved extensive bombardment and a blockade of the civilian population for the past 20 months. The operation aims to dismantle Hamas following the group’s attack on Israel on Oct. 7,2023.