Oil Prices Jump as Iran and Israel Exchange Missile Strikes, Threatening Ceasefire

Oil prices jumped after Iran and Israel exchanged missile and air strikes, raising fears that a fragile ceasefire could unravel and further complicating already faltering peace efforts. According to Bloomberg, the fighting and the risk of wider escalation pushed crude higher as traders weighed the possibility of supply disruptions in a region central to global energy flows.

The latest round of violence began after Iran fired missiles at Israel, which Israeli officials said was the first such bombardment since the ceasefire took effect in April. Israel then carried out retaliatory strikes on military targets in central and western Iran, the Israel Defense Forces said, and Iranian state media reported explosions in several cities, including Tehran and Isfahan, according to reporting from Axios and The Independent.

The exchange marks a significant escalation because it is the first time Israel has struck Iran since the April ceasefire, Axios reported. It also comes at a moment when Washington has been trying to prevent the conflict from widening; Bloomberg and The Independent said President Donald Trump urged restraint and pushed for both sides to give peace talks a chance, even as Israel moved ahead with its response.

The attacks have intensified concerns that diplomacy could collapse. Bloomberg reported that the exchanges are jeopardizing talks aimed at ending the war, while Axios noted that continued fire could endanger ongoing discussions between the U.S. and Iran. The Independent also reported that Iran warned it would intensify attacks and could target U.S. bases in the region if Israel retaliated.

The market reaction was immediate and not limited to oil. Bloomberg said gold also extended losses as investors assessed the shifting risk picture, while traders focused on the possibility that a broader conflict could threaten shipping routes, energy infrastructure, and regional stability. The move in crude reflects how quickly geopolitical risk can feed into commodity markets when fighting involves two of the Middle East’s most closely watched military rivals.

For Israel, the strikes appeared aimed at signaling a forceful response without waiting for diplomacy to play out. For Iran, the missile volley showed a willingness to answer pressure directly, including after reported Israeli attacks on other fronts. What happens next will likely depend on whether both sides heed calls to stand down or continue trading fire, a decision that could determine not only the fate of the ceasefire but also the direction of regional energy prices in the days ahead.