Oil markets roiled as Israel bombs Iran, Tehran readies war response in escalating clash

Iran is poised to declare war on Israel after Israeli airstrikes early Friday hit Iranian nuclear and military facilities, Iranian state media reported—escalating the crisis in the Middle East and sparking panic in global oil markets.

Explosions rattled Tehran in the early hours, as Iran’s state broadcaster confirmed its air defenses were operating at full capacity. The strikes, described by Israeli officials as “preemptive,” came just hours after former U.S. President Donald Trump warned of a “massive conflict” and announced a drawdown of U.S. personnel in the region.

Israel’s Defense Minister Israel Katz issued a stark warning: “Following the State of Israel's preemptive strike against Iran, a missile and drone attack against the State of Israel and its civilian population is expected in the immediate future.”

The assault marks a dramatic escalation of hostilities rooted in the October 7 Hamas attacks and Israel’s ongoing offensive in Gaza. Prime Minister Benjamin Netanyahu has increasingly signaled a shift toward a more aggressive military posture, particularly against Iran and its regional proxies.

In immediate fallout, oil markets surged amid fears of supply disruption. Brent crude futures spiked $5.29, or 7.63%, to $74.65 a barrel, hitting an intraday high of $75.32—the highest since April 2. U.S. West Texas Intermediate crude jumped $5.38, or 7.91%, to $73.42 after touching $74.35, its highest mark since February 3.

The price surge reflects growing concern that a broader war could engulf critical oil-producing regions and disrupt shipping routes in the Persian Gulf.

US denied any involvement in the Israeli strikes, but Donald Trump, speaking from the White House Thursday, hinted at foreknowledge: “I don't want them going in, because I think it would blow it,” he said of ongoing nuclear talks with Tehran. “Might help it actually, but it also could blow it.”

Meanwhile, Iran signaled further escalation on the nuclear front. Behrouz Kamalvandi, spokesman for the Atomic Energy Organization of Iran, announced plans to install advanced sixth-generation centrifuges at the Fordo enrichment plant, a move bringing Iran closer to weapons-grade uranium.

As Iran edges toward a formal declaration of war, military analysts warn the region could spiral into a sustained, high-intensity conflict with global economic repercussions.