Tensions in the Middle East have sharply escalated as Israel and Iran are exchanging direct attacks. Israeli Prime Minister Benjamin Netanyahu declared that Iran will "pay the full price" after rockets struck civilian areas and a hospital in central Israel. In response, Israeli forces reportedly attacked Iran’s nuclear facility in Arak. Meanwhile, the United States is considering military action against Iran, potentially targeting the underground Fordow uranium enrichment site this coming weekend. According to multiple sources, President Trump has already approved the plan but is delaying its execution, awaiting Iran’s response regarding its nuclear ambitions. Additionally, The New York Times reports that a source from Iran’s Foreign Ministry has expressed readiness to meet with Trump soon.
Goldman Sachs: Oil Risk Premium Could Increase
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Create account Try a demo Download mobile app Download mobile appGoldman Sachs notes that Brent crude currently includes around a $10 geopolitical risk premium, reflecting the likelihood of regional disruptions. While the bank's base case expects Brent prices to decline toward $60 per barrel in Q4 (if no major supply shocks occur), it warns that restricting Iranian exports could push prices above $90. In more severe scenarios — such as attacks on oil infrastructure or transport routes — prices could rise significantly further. Thus, despite a moderate base case, supply-side risks justify the current premium in oil pricing.
Oil Prices React to Geopolitical Risk
WTI crude is up 1.55% today, reaching $74.20 per barrel and approaching a key technical resistance level — previously tested last week at the start of the conflict. This level is now viewed as a critical threshold: if tensions escalate further, oil may break above it decisively, potentially triggering a sustained price rally. The current move reflects both fears of supply disruptions and broader market anxiety.
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