In a sharp escalation, Israel’s Operation “Strength of a Lion” carried out airstrikes on Iranian nuclear and military targets. Tehran declared a state of emergency and vowed retaliation. Financial markets instantly priced in heightened geopolitical risk: Brent crude spiked over 7% to $75 per barrel, gold climbed past $3,450, and safe havens like the Swiss franc and yen rallied. U.S. stock futures fell over 1%, and bond yields declined as investors sought shelter. With Iran controlling the Strait of Hormuz—through which 20% of global oil supplies transit—any disruption could trigger energy shocks and complicate central banks’ plans to cut rates.
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Israel Strikes Iran in Operation ‘Strength of a Lion’; Oil & Gold Spike
Israel launched a preemptive strike on Iran’s nuclear and military sites to eliminate what it sees as an imminent nuclear threat. It expects a strong Iranian response, raising the risk of a wider regional war and spillover into neighboring oil exporters.
The attack sent oil prices (WTI and Brent) up over 10%, as traders feared Middle East supply cuts. Gold jumped past $3,450, and safe-haven currencies like the Swiss franc and Japanese yen also rallied amid rising volatility.
Strait of Hormuz Risk
Sanctions limit Iran’s oil exports, but it still controls the Strait of Hormuz—through which 20% of global oil flows. Any closure or disruption there would trigger severe supply shocks, far worse than past crises, and would push energy inflation sharply higher.
Inflation Outlook
With oil transit under threat, sustained prices above $75/barrel in H2 could turn energy inflation positive. That would hamper central banks’ plans to cut rates and could undermine global economic stability.
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