Oil jitters as U.S. strikes on Iran raise global market fears
Published: 22 Jun. 2025, 19:14
Updated: 22 Jun. 2025, 19:15
Audio report: written by reporters, read by AI
![U.S. President Donald Trump, front, speaks from the East Room of the White House in Washington on June 21. [AP/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/06/22/6f614498-ae1c-4fe5-9fdb-d6558d76009b.jpg)
U.S. President Donald Trump, front, speaks from the East Room of the White House in Washington on June 21. [AP/YONHAP]
Korea and other energy-importing countries are bracing for turbulence in global oil and financial markets after the United States launched a surprise airstrike on Iran’s nuclear facilities on Saturday.
"A U.S. attack on Iranian nuclear sites could lead to a knee-jerk reaction in global markets when they reopen, sending oil prices higher and triggering a rush to safety," a Reuters report said on Saturday.
Mark Spindel, chief investment officer at Potomac River Capital, also warned of a rise in oil prices.
"I think the markets are going to be initially alarmed, and I think oil will open higher," Spindel said.
Oil price volatility is a central concern. Following Israeli airstrikes on Iran on June 10, Brent crude futures surged as much as 18 percent, while West Texas Intermediate (WTI) rose up to 14 percent.
After U.S. President Donald Trump issued a two-week ultimatum to Iran on Friday, Brent crude fell 2.3 percent to $77.01 a barrel and WTI dropped 0.3 percent to $74.93.
![The LyondellBasell Houston refinery is seen on June 18 in Houston, Texas. [AFP/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/06/22/b4155566-4a90-499d-b26a-6d4197a7a197.jpg)
The LyondellBasell Houston refinery is seen on June 18 in Houston, Texas. [AFP/YONHAP]
But analysts say the U.S. military’s direct strike on Iran’s nuclear sites reopens the possibility of a sharp rise in prices.
Iran’s response is now the key variable.
“This U.S. attack could see a conflagration of the conflict to include Iran responding by targeting regional American interests that could include Gulf oil infrastructure in places such as Iraq, or harassing passage through the Strait of Hormuz,” Saul Kavonic, energy analyst at MST Marquee, told Bloomberg.
An average of 20 million barrels of crude oil passed through the Strait of Hormuz daily last year, equivalent to one-fifth of global consumption, according to the U.S. Energy Information Administration.
More than 99 percent of Middle Eastern crude imported to Korea also moves through the strait.
Markets are already flashing warning signals. Bloomberg reported that charter rates for oil tankers traveling from the Middle East to China surged nearly 90 percent after the initial Israeli strike.
Shipping and insurance costs for vessels carrying gasoline and jet fuel also increased.
“Tanker freight rates on routes out of the Middle East have risen sharply over recent days, with some owners wanting to avoid the region or demand higher risk premiums to operate in the area,” Stephen Gordon, managing director at London-based Clarkson Research, told the Financial Times. “However, oil flows from the region have continued.”
Rising oil prices could also accelerate inflation. Higher prices weigh on consumer sentiment and reduce the Federal Reserve’s room to cut interest rates.
Trump has repeatedly promised to lower energy prices and has pressured the Fed to cut rates. But his administration’s military moves risk fueling inflation instead.
Oxford Economics, in a report released before the U.S. strike, warned that in the worst-case scenario — such as a closure of the Strait of Hormuz — global oil prices could reach $130 per barrel.
That would push the U.S. inflation rate to nearly 6 percent by year-end, far above the Fed’s 2 percent target.
Capital Economics predicted that if crude prices exceed $100, inflation in advanced economies could rise by one percentage point.
![In an aerial view, oil storage tanks are seen at the Enterprise Sealy Station on June 19 in Sealy, Texas. [AFP/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/06/22/81ca22fd-5c1e-499e-a9b4-7f62418d4649.jpg)
In an aerial view, oil storage tanks are seen at the Enterprise Sealy Station on June 19 in Sealy, Texas. [AFP/YONHAP]
Analysts at Deloitte said that because oil is integral to producing a wide range of goods and services — from items like plastic toys to airline travel — disruptions in supply due to conflict could have broad economic impacts, potentially limiting the Federal Reserve’s ability to lower interest rates.
Market volatility has also increased. Wars tend to drive investors toward safe-haven assets.
"The ICE U.S. Dollar index is up about 1 percent since the first bombing," the Wall Street Journal reported on Friday. "More important, the currency behaved as it should, rising on days dominated by fear and falling on days when fear receded."
But some analysts warn that the dollar’s long-term dominance could weaken.
"With this demonstration of strength and the total destruction of its nuclear capability, they have lost all their leverage and are likely to hit the escape button for a peace agreement," Jamie Cox, managing partner at Harris Financial Group, said.
Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY PARK YU-MI [[email protected]]
with the Korea JoongAng Daily
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