Crude oil prices jumped more than 3% on Friday after Israel carried out a military strike on Iran and sparked widespread concern in the Middle East.
Israel carried out limited military strikes against Iran and is now assessing the effectiveness of the strikes and the damage they have caused. The operation was carried out early Friday morning local time.
Both oil benchmarks started paring gains after hitting more than 3% on news of an explosion in Iran. Global benchmark Brent traded 1.73% higher at $88.63 a barrel after earlier surpassing $90.
Meanwhile, US West Texas Intermediate (WTI) rose 1.75% to $84.1 per barrel.
Iran's Fars news agency reported explosions were heard near the airport in Isfahan and flights to Tehran and Shiraz airports were suspended. Radar tracking site Flight 24 reported that several flights were diverted in Iranian airspace.
The Islamic Revolutionary Guard Corps in its Telegram reported that there were no explosions in the Isfahan area and that the noise was caused by Iranian defenses. The armed forces also said that the nuclear facilities in Isfaham province are in a completely safe condition.
Last weekend, Iran attacked Israel by launching more than 300 missiles and drones in response to an attack on its embassy in Damascus, Syria.
The risk to the oil market in a widening Middle East war will be decided based on the volume of oil exports from the Arabian Gulf. The region is responsible for supplying more than 20 million barrels of oil per day.
If there is a disruption in the Strait of Hormuz, which is located between Iran and Oman, it will cause oil prices to rise higher because that location is the main point and controls 20% of the world's crude oil production.
