Oil Surges 6% After Weekend Strike on Iran

A new week begins after a highly eventful weekend. Donald Trump once again used the weekend to introduce a major geopolitical shock, this time involving an attack on Iran. As expected, markets opened with a classic risk-off reaction.

Oil reacted immediately. Crude opened with a bullish gap, pulled back briefly, and then resumed its climb. As we move toward the European session, oil is trading roughly 6% higher. The initial move reflects geopolitical risk premium being priced in.

Precious metals are also firm. Gold is pushing significantly higher, while silver is positive but slightly lagging. The move is consistent with a flight to safety, although silver’s relative underperformance suggests the rally is driven more by defensive flows than broad commodity demand.

In the currency market, the pattern is largely textbook risk-off. The US dollar and Swiss franc are gaining, while most other currencies are under pressure. The interesting exception is the Japanese yen. During the early Asian session, the yen initially strengthened, with yen pairs opening lower. However, as we approach Europe, the yen is giving back those gains and yen crosses are moving higher. That suggests the initial safe-haven bid in the yen was short-lived.

Equity futures are clearly on the red side. The reaction is significant but not disorderly. Investors are repricing geopolitical risk rather than panicking.

On the macro calendar, the only notable release today is the US ISM Manufacturing PMI. Beyond that, headlines will dominate.

Another important development is the decision by OPEC+ to increase production by 206,000 barrels per day. This move appears aimed at stabilizing the market and limiting excessive upside in oil prices. If implemented effectively, it may cap further aggressive rallies in crude, even with elevated geopolitical tensions.

For now, the tone is clearly defensive. The key question is whether this risk-off sentiment intensifies as Europe and the US fully enter the session, or whether markets gradually absorb the shock and stabilize.

Source: https://www.axiory.com/analytics/market-news/oil-surges-6-after-weekend-strike-on-iran