The oil market is feverish after the news from Israel and Iran: will there be a new fuel crisis?
13 June 2025 18:21
OPINION
Oil market prices rose again after news of an escalating situation in the Middle East, particularly between Israel and Iran. The market reacted nervously, which is natural from the point of view of the psychology of finance: every tension in this region is traditionally seen as a potential threat to raw material supplies and transportation flows.
Energy expert Gennady Ryabtsev, who gave an exclusive commentary to "Komersant Ukrainian", explained that this growth is rather a temporary reaction of speculative capital to an information trigger and therefore does not reflect fundamental changes in the supply-demand ratio on the global oil market.
Oil prices are rising. Yes, they are responding to events in Israel and Iran. The numbers are still fluctuating, but the question is: to what point will they grow?” says Ryabtsev.
The expert insists that these changes are not caused by economic and political factors, but mainly by the fact that some market players have taken advantage of the situation to raise fuel prices.
It’s no secret that the global oil market is dominated by a group of large financial institutions – funds, banks and other speculators – that are rapidly improving their positions using all possible information and political changes.
This has nothing to do with economic and political reasons. The market today is well supplied with raw materials. Supply is currently higher than global demand,” says Ryabtsev.
“Industry reports confirm this: global oil production exceeds demand, which remains at a fairly stable high level. No restrictions on oil supplies have been imposed so far, transportation is working normally, and there have been no long interruptions in logistics. This suggests that this rise in prices in the energy market is temporary.
Ryabtsev’s explanation of market psychology is no less revealing.
It is not the economy that determines these movements, but expectations and fear. These are speculators’ fears that a temporary aggravation could interrupt the flow of raw materials. They play on this while the situation is at its peak,” he says.
“This makes the market very sensitive to all sorts of news – every statement by officials, every report of possible missile and bomb strikes or attacks can trigger a new round of price increases.
No wonder that some traders rushed to transfer assets from other industries into oil contracts, thereby fueling this process. This is an old scenario: while everyone is afraid, prices rise, allowing those who bought earlier to sell off at a profit.
Gennadiy Ryabtsev points out that this phenomenon is temporary.
“When the situation stabilizes, oil prices will go down again. They will definitely return to the level they were at before, and perhaps even lower. This will happen after speculators leave the fuel market, invest their money in other assets and play for lower prices,” he says.
It is worth noting that all this movement is taking place against the backdrop of fairly strong industry fundamentals. OPEC, for example, does not see any need to cut production yet. The reserve capacity is enough to cover all the needs of the global economy. This indicates the temporary nature of this growth.
Thus, the current rise in oil prices should be viewed as a temporary reaction to the news background and market psychology, rather than as an indicator of fundamental structural shifts in the supply-demand balance. The market, by its nature, will quickly digest all these changes, prices will adjust, and the situation will return to normal.
Read also: Oil prices fluctuate due to uncertainty over US-China talks
The conflict between Israel and Iran in 2025: what you need to know
In June 2025, the situation in the Middle East escalated again to a critical point. Israel launched a series of precision strikes on Iran’s nuclear facilities and military targets, the most serious such attack in recent years. The decision to launch a preemptive strike was made after intelligence information about Iran’s uranium enrichment rate. At the time, Israeli Prime Minister Benjamin Netanyahu said that Tehran was close to creating at least nine nuclear warheads.
As a result, the Israeli Air Force attacked the city of Natanz and other Iranian nuclear facilities with missiles and bombs. During this operation, the military destroyed uranium enrichment facilities and some command posts of the Iranian Revolutionary Guard. The official Tehran confirmed the loss of at least 78 people, including high-ranking officials from the Islamic Revolutionary Guard Corps and nuclear specialists.
Not to be outdone, Iran retaliated with drone missile strikes on Israeli infrastructure. Its military launched more than 100 drones, most of which were intercepted by Israeli air defense, but some reached their targets and damaged administrative facilities and power plants
The United States, European leaders, and the United Nations expressed great concern about the situation. Washington hastened to call on all parties to de-escalate and start a negotiation process. The current US President Donald Trump has warned that the conflict could turn into a “large-scale war” if all opportunities for a peaceful settlement are lost.
The situation inside Iran is no less tense. Supreme Leader Ali Khamenei has vowed to punish Israel and said that Tehran will resume its uranium enrichment program. At the same time, he rejected all U.S. attempts to resolve the problems at the negotiating table, calling the Israeli strikes “an act of war that requires a tough response.”
The issue of supplying the global oil market plays a significant role in this process. The market immediately reacted to the news from the Middle East by increasing Brent prices by 5-7%. Economists point out that the situation is still a one-off, and global oil reserves will cover a temporary reduction in supplies, but in the event of a large-scale war, fuel prices will rise rapidly and uncontrollably.
The situation has had an equally serious impact on Israel’s economy. Rating agencies have downgraded the country’s sovereign rating, indicating a growing risk of a large-scale regional conflict. This could lead to an outflow of investments and the economic and political isolation of Israel on the world stage.
Read also: Israel launches a large-scale strike against Iran: military anatomy of the operation
However, not everyone in the world puts the blame on Tehran. The intelligence of a number of countries speaks of possible provocations on the part of Israel and overstated data on the level of uranium enrichment. This gives grounds for political experts to assume that the Israeli authorities used the threat of Iran’s nuclear program as a pretext for a preemptive strike.
External interference does not help the situation either. The United States still maintains its support for Israel, but insists on de-escalation. Regional partners, including Oman, are trying to mediate between the parties to avoid a large-scale confrontation. Negotiations between American and Iranian diplomats have already begun in Oman.
Thus, so far, all parties are focusing on targeted strikes and demonstrations of force to improve their negotiating positions. Whether this conflict will turn into a new regional war will depend on the willingness of the leaders to compromise and on the assistance provided by external partners in this process.
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