Oil prices surged around 8% on Friday morning after Israel launched airstrikes on Iran, marking a significant escalation in the Middle East conflict.

International benchmark Brent crude futures (BZ=F) rose to just below $74 a barrel, while West Texas Intermediate futures (CL=F) changed hands at almost $73. Both were paring earlier sharper gains that saw Brent spike by more than 13%.

Prime Minister Benjamin Netanyahu said Israel is prepared to keep attacking Iran "for as many days as it takes" after his country carried out strikes on its nuclear and military facilities overnight.

"Over the past few months, intelligence has shown that Iran is closer than ever to obtaining a nuclear weapon," IDF spokesperson BG Effie Defrin said in a video statement. "This morning, the IDF began preemptive and precise strikes, targeting the Iranian nuclear program."
On Friday morning, President Trump urged Iran to "make a deal" over its nuclear program to avert further conflict. "JUST DO IT, BEFORE IT IS TOO LATE," he wrote in a post to social media.

Iran has threatened to hit US assets in the region as part of its retaliation, even as Secretary of State Marco Rubio warned the country against such a move. Rubio said Israel took "unilateral action" and the US was not involved in the strikes.
Iran is the third-largest oil producer within the Organization of the Petroleum Exporting Countries (OPEC), trailing only Saudi Arabia and Iraq, with output exceeding 3 million barrels per day.

“The most immediate risk is to Iranian exports, which could drop sharply from the current 1.6 to 1.8 million barrels per day if maximum pressure tactics escalate or broader disruptions occur,” Rebecca Babin, US senior energy trader at CIBC Private Wealth, told Yahoo Finance Thursday night.

“There’s also the possibility — though still uncertain — of direct supply losses if Israel targets Iranian oil infrastructure,” she added.
Iran has launched 100 low-flying drones toward Israeli territory in retaliation, an Israeli military spokesman told Reuters. While the swarm is likely to take several hours to reach its target, it could just be paving the way for a missile bombardment later.

It remains unclear whether the conflict could spill over into the broader region.
“We can probably expect a temporary slowdown in oil tanker traffic through the Strait of Hormuz,” Ed Hirs, senior fellow at the University of Houston, said in an interview with Yahoo Finance.

Tehran has repeatedly threatened to block the strait, a vital chokepoint through which as many as 20 million barrels of oil pass each day.
On Wednesday afternoon, crude futures surged more than 4% after the US ordered the evacuation of non-essential embassy personnel from Iraq, amid rising regional threats.

Supply concerns also mounted this week after President Trump indicated during a podcast that he’s increasingly doubtful Washington will reach a nuclear deal with Iran, as recent talks have stalled.

"I don't know. I did think so, and I'm getting ... less confident about it," Trump said on the program "Pod Force One," which aired on Wednesday.