Kalkine: Oil Stocks Surge as Middle East Tensions Push Crude Prices Higher

June 13, 2025 02:58 PM AEST | By Team Kalkine Media

Kalkine: Oil Stocks Surge as Middle East Tensions Push Crude Prices Higher — Image source: Shutterstock

Market Reaction in Australia

The Australian share market reflected this geopolitical tension with a notable upswing in energy-related equities. Leading the charge was Woodside Energy Group Ltd (ASX:WDS), which climbed 6.8% by early afternoon. Not far behind, Santos Ltd (ASX:STO) saw its share price rise by 4%.

Smaller peers also participated in the momentum. Karoon Energy Ltd (ASX:KAR) soared 9.4%, making it one of the top movers in the energy space. Beach Energy Ltd (ASX:BPT) added 3.2%, and Ampol Ltd (ASX:ALD) rose by 2.2% as investors repositioned based on rising oil valuations.

This broad rally in oil-related stocks provided substantial support to the energy sector overall, which gained 4.6%—a bright spot on a day when the ASX 200 index fell by 0.2%.

Global Crude Oil Rally

On the international front, oil benchmarks experienced some of the strongest single-day gains in months. The Brent crude benchmark surged 10.1% to reach US$76.38, while West Texas Intermediate (WTI) jumped 11.2% to US$75.68. These spikes were directly tied to growing concerns about potential supply disruptions in the Middle East.

Geopolitical Drivers

The root of the price jump stems from Israel’s announcement that it had launched strikes against what it described as “dozens” of strategic military and nuclear locations in Iran. The military action occurred amid ongoing and contentious negotiations involving the U.S. and Iran over nuclear policy.

Israel's leadership has reaffirmed its commitment to neutralizing what it sees as long-term threats, stating the operations would persist “for as many days as it takes.” Such strong rhetoric has heightened investor fears of a prolonged conflict, further boosting oil market volatility.

Broader Market Implications

This sharp escalation in geopolitical tension underscores how sensitive global commodity markets remain to international conflicts. For ASX-listed oil and energy companies, such developments often lead to rapid price re-evaluations due to their direct exposure to commodity trends.

As uncertainty continues to cloud the geopolitical horizon, the energy sector may remain a focal point of market activity in the near term. Investors and analysts alike will be closely watching for further developments in the Middle East and their potential ripple effects across global markets.

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