Oil Market Dynamics Amid Global Tensions and Policy Shifts

The oil market experienced significant volatility on June 12, 2025, driven by geopolitical tensions and policy developments. As of June 10, 2025, the close price for crude oil was $68.15 per barrel, with a 52-week high of $87.59 on July 3, 2024, and a low of $55.12 on April 8, 2025.

Geopolitical Tensions and Price Fluctuations

Analysts have expressed concerns that the oil market may struggle to absorb a potential surge in supply from OPEC+ beyond the summer, as reported by Seeking Alpha. This sentiment is compounded by escalating tensions in the Middle East. An Israeli attack on Iran could potentially push oil prices above $100 per barrel, as tensions mount, according to CNBC. This scenario has already led to a spike in crude prices by up to 5%, although gains were later pared.

President Donald Trump’s comments suggesting that Israel “could very well” strike Iran, despite advising against it during ongoing negotiations over Tehran’s nuclear program, further fueled oil price advances, as noted by Bloomberg.

Market Reactions and Profit Booking

Despite the initial surge, oil prices settled slightly lower on June 12, as traders booked profits from a 4% rally in the previous session, driven by concerns over potential supply disruptions in the Middle East, reported by Business Times. This profit-taking led to Brent crude futures settling down 41 cents.

Impact of US Tariff Threats

US tariff threats have also weighed on crude oil prices. On June 12, July WTI crude oil closed down 0.11%, and July RBOB gasoline closed down 1.10%, as reported by Nasdaq and Barchart. These tariff threats have contributed to the volatility in oil prices, erasing early gains.

G7 and Russian Oil Price Cap

In a significant policy development, most G7 members are reportedly ready to lower the price cap on Russian oil, even without US participation, as per reports from FXStreet and The Edge Malaysia. This move could have implications for global oil supply and pricing dynamics.

Conclusion

The oil market remains sensitive to geopolitical developments and policy shifts. As tensions in the Middle East continue to evolve and policy decisions regarding Russian oil are made, market participants will closely monitor these factors for their potential impact on oil prices.