Source: Sharecast
As at 1200 BST, benchmark Brent crude had put on 8% at $74.74 a barrel. West Texas Intermediate was also 8% higher, at $73.66.
Gold, meanwhile, was up 1% at $3,417, pushing back up towards recent record highs as investors retreated into safe-haven assets. The US dollar was also higher against a basket of currencies.
Israel launched a series of attacks overnight on Iran’s nuclear programme and military facilities.
Several military figures were killed, including two high-level commanders.
Iran said none of its oil installations had been hit, but investors remained concerned about the impact of renewed geopolitical tensions in the region on supplies, with Tehran widely expected to retaliate.
Israel launched the attacks as part of an ongoing programme to try and stop Iran building a nuclear weapons.
Talks between Washington and Tehran have so far failed to secure a diplomatic solution, and posting on Social Media, Donald Trump said the next attacks would be “even more brutal” if Iran failed to make a deal.
The post said that the US “makes the best and most lethal military equipment anywhere in the world by far and…Israel has a lot of it, with more to come – And they know how to use it.
“No more death, no more destruction. Just do it, before it is too late.”
Oil spiked immediately overnight following the attacks, and while some of the gains were later pared back, prices remained strongly higher during trading on Friday.
Richard Hunter, head of markets at Interactive Investor, said: “Global markets are being rattled by an escalation of Middle East tensions.
“Of particular concern is the likelihood of retaliatory measures which, if aimed at the Strait of Hormuz – where around 20% of global flows are handled – would further potentially constrict supply.”
The Strait of Hormuz, a narrow waterway separating Iran from the Gulf states, is a major conduit for seaborne oil supplies.
Kathleen Brooks, research director at XTB, said: “Geopolitics and the surge in the oil price are dominating markets.
“The sheer scale of the attack the potential devasting consequences for the region is likely to support the oil price at elevated levels. Typically, geopolitical risks do not have a long term impact. However, this is a complex and evolving situation.
“Gold…is hurtling towards a new record high set earlier this month. If the escalation continues, or if a nuclear threat arises, this could trigger a surge in gold beyond $3,500 in our view.”