Middle East Tensions Cause Oil Price Rollercoaster

- Crude oil futures slipped after a substantial rise on June 12, 2025. - Fears of an Israel-Iran conflict and U.S. evacuation orders drove the market. On June 12, news outlets reported significant oil price changes as fears over a potential Israel-Iran conflict loomed. On the same day, Reuters reported a pullback in crude oil futures, which occurred after a notable surge in the previous session; Reuters cited Zawya and Equityworld Futures Portal News for this information. Concerns over a potential conflict between Israel and Iran, alongside the U.S. strategic response to these threats, primarily drove this volatility. According to these reports on June 12, oil prices eased as the market assessed the U.S. decision to evacuate personnel from the Middle East, a decision made in anticipation of upcoming talks with Iran about its nuclear activities. Specifically, by 0901 GMT on June 12, Brent crude futures fell 73 cents (1.1%) to $69.04 per barrel, while U.S. West Texas Intermediate (WTI) crude simultaneously decreased by 66 cents (1%) to $67.49 per barrel. This drop followed a more than 4% surge in both benchmarks the prior day, which had pushed them to their highest levels since early April. Later on June 12, Cryptopolitan provided updates at 4:14 PM UTC, indicating WTI futures were down 54 cents (0.8%) at $67.61 per barrel, and Brent crude futures were also down 56 cents (0.8%) to $69.22 per barrel by 11:15 a.m. Eastern Time. Similarly, on June 12, the Financial Times reported Brent crude at $68.55 and WTI at $66.91 around 12:44 BST. On the same day, Trading Economics noted Brent crude at $69.78 and WTI around $67.50 later in the day, highlighting continuous price fluctuations. Fears that an armed conflict between Israel and Iran could disrupt crude oil supplies caused the initial price surge, and the U.S. directive further amplified these concerns. This directive ordered a partial evacuation of its embassy in Iraq and authorized the voluntary departure of military families and non-essential personnel from various Middle Eastern locations, including Bahrain and Kuwait. On June 12, U.S. President Donald Trump stated that the U.S. was moving personnel due to potential danger and reiterated that the U.S. would not allow Iran to develop nuclear weapons. Additionally, on June 12, Iran's Defense Minister warned that Tehran would target U.S. bases in the region if the nuclear talks failed and conflict ensued. This development occurred as, on June 12, the International Atomic Energy Agency's (IAEA) board passed a resolution declaring Iran in non-compliance with its nuclear safeguard obligations. Despite the elevated rhetoric, U.S. and Iranian officials plan to meet in Oman on Sunday to continue discussions aimed at reviving stalled nuclear negotiations. Market analysts are closely monitoring the situation, particularly the Strait of Hormuz, a crucial chokepoint for global oil shipments. On June 12, JP Morgan analysts warned that crude prices could surpass $120 or even $130 per barrel if Iran blockaded the Strait, through which about 20-30% of the world’s seaborne oil trade transits. However, on the same day, JP Morgan maintained its base forecast for oil prices to remain in the low-to-mid $60s through 2025, suggesting that current prices already account for a geopolitical risk premium. Furthermore, some analysts believe recent military maneuvers and evacuations might be tactics to strengthen the U.S. negotiating position. As of June 12, 16:00 UTC, crude oil (WTI) traded at $67.61. According to financial data sources on June 12, this price showed a 0.8% decrease in the past 24 hours.