Andrew Hecht
5 min read
In This Article:
In a May 15 Barchart article that asked if there was more downside in crude oil, I cautioned:
The geopolitical landscape remains highly tense, with potential hostilities in the Middle East and other regions. Any geopolitical surprises could ignite a recovery rally in crude oil futures, but so far in 2025, the price has been falling in a very volatile world.
Nearby NYMEX crude oil futures were at $63.42 per barrel on May 14. In late June, the price was only slightly higher after a volatile period. While the war in the Middle East posed the potential for oil prices to rise above $100 per barrel, the energy commodity’s rally ran out of upside steam.
Israel’s June 13 attack on Iran caused NYMEX crude oil prices for August 2025 delivery to rise to a new high for 2025.
The daily year-to-date chart shows the June 13 rally that led to a high of $75.50 on June 16. Meanwhile, The U.S.’s June 21 bombing of Iran’s nuclear infrastructure caused the energy commodity to rise to another new high of $78.40 per barrel before correcting. However, the ceasefire on June 13 sent prices back to the $65 level on June 25.
The U.S. policy under President Trump has been that Iran will never have a nuclear weapon. After negotiations failed and a sixty-day deadline passed, Israel made the first move to attack Iran’s nuclear facilities and clear its airspace. The United States attempted to finish the job on June 21 with its bunker-buster weapons that can drill deep into the earth to eliminate underground nuclear enrichment facilities.
Iran has been at odds with Israel and the U.S. for forty-six years since the 1979 Islamic Revolution. Iran has sought nuclear power and weapons over the past years. The latest round of negotiations failed, causing Israel and the United States to bomb Iran’s nuclear infrastructure.
Iran is an OPEC member as it is a leading oil-producing country.
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The chart shows that Iran is the world’s eighth-leading oil-producing country, behind Brazil and ahead of the United Arab Emirates. Ironically, Iran is the current President of the international oil cartel. With an output of over 3.3 million barrels per day, Iran is the fourth-leading OPEC+ producer.
