Oil Surges, USD Strengthens as Middle East Conflict Escalates

Oil prices spiked sharply Friday as reports emerged of Israeli military action against Iranian nuclear facilities, triggering widespread risk aversion across financial markets. The escalation sent futures tumbling with major equity indices posting significant losses, while the US dollar gained broadly against risk-sensitive currencies. Safe-haven assets saw increased demand, with gold advancing alongside the greenback in an unusual correlation driven by geopolitical uncertainty. The timing on Friday the 13th added to market nervousness, with traders rapidly unwinding risk positions. Energy sector volatility intensified as markets priced in potential supply disruptions from the Persian Gulf region, which accounts for approximately 30% of global oil shipments. Technical analysis shows crude oil breaking above key resistance levels, suggesting further upside potential if tensions persist. Currency markets reflected classic risk-off positioning, with commodity currencies underperforming while traditional safe havens outperformed.