Tensions Around Iran's Periphery: Oil Prices Soar to Near $70

June 12, 2025 11:42 AM

Iranian oil extraction scene.

The market was caught off guard by news of a potential armed conflict following the breakdown of nuclear negotiations between the U.S. and Iran, causing international oil prices to surge near $70 per barrel.

Oil prices have already approached $70 per barrel. On June 12, the Brent North Sea benchmark crude price broke through $69 per barrel.

The trigger for the sharp rise in oil prices was related news about the possible breakdown of nuclear negotiations between the U.S. and Iran. According to CBS and The New York Times reports, Israel may launch an attack on Iran, prompting Washington to reduce personnel at its embassy in Iraq and allowing voluntary evacuation of U.S. embassy staff from the region.

Iran also responded accordingly.

Defence Minister of Iran, Aziz Nasirzadeh, told the media: "If the other side forcibly provokes a conflict, their losses will far exceed ours. At that time, the United States must withdraw from the region because all of its bases are within our strike range. We have the ability to attack these bases and will not hesitate to include all targets within our strike range."

Phil Flynn, an analyst with Platts Energy Information (Price Futures Group), pointed out: "The market had not anticipated such severe geopolitical risks."

The sixth round of U.S.-Iran talks, originally planned for this weekend in Oman, has yet to confirm whether the meeting will proceed as scheduled.

Igor Yushkov, an expert at the Finance University under the Government of Russia and chief analyst of FNEB, stated: "This is already a conflict with an oil-producing country, which may cause a chain reaction in the oil industry."

He believed that any attack might target Iran's oil export infrastructure, while Iran's current oil supply is approaching pre-sanction levels.

"Iran only needs to increase its daily production by about 500,000 barrels to restore it to pre-sanction levels. Currently, Iran's daily exports exceed 1.5 million barrels," added the chief analyst of FNEB.

Igor Yushkov further pointed out that if a conflict were to break out, oil prices would continue to rise: "I think oil prices could reach $80 per barrel."

The expert also reminded that Iran had threatened to block the Strait of Hormuz if attacked, and 20% of global oil and liquefied natural gas transportation passes through this strait.

"If both sides continue with new rounds of negotiations, oil prices may fall below $70. The market will continue to focus on signals released at the political level," added the chief analyst of FNEB.

Original article: https://www.toutiao.com/article/7515234554286703115/

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