Oil prices jump on preps of strike

CRUDE prices rallied yesterday following a report that US intelligence suggested Israel was planning a strike on Iranian nuclear facilities, which would send geopolitical tensions into overdrive and fuel regional conflict fears.

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While safe haven gold pushed almost two percent higher, the news from CNN appeared to be having little detrimental effect on Asian equities, with most extending the previous day's rally.

Still, investors are keeping tabs on China-US relations after Beijing hit out at Washington's “bullying” over chip export controls, just over a week after the two sides dialled down trade tensions by temporarily slashing eye-watering tit-for-tat tariffs.

Both main crude contracts jumped more than one percent after CNN reported multiple US officials as saying the government had received intelligence indicating Israel was preparing to target Iranian atomic facilities.

There are fears that such a sharp escalation could tip the Middle East into a war, with tensions already high over Israel's strikes on Gaza.

US President Donald Trump said last week that “I think we're getting close to maybe doing a deal” on Tehran’s nuclear programme and then a day later called on the Islamic republic to “move quickly or something bad is going to happen’.

But Irans supreme leader Ayatollah Ali Khamenei warned this week that nuclear talks with Washington were unlikely to yield any results after four rounds of Omani-mediated nuclear talks with the US since April 12.

“This is the clearest sign yet of how high the stakes are in the US Iran nuclear talks and the lengths Israel may go to if Iran insists on maintaining its commercial nuclear capabilities,” Robert Rennie, at Westpac Banking Corp, said.