Oil prices jumped more than 7% on Friday, trading near multi-month highs after Israel launched widescale strikes against Iran, sparking Iranian retaliation and raising worries about disrupted oil supplies.

Brent crude futures jumped $5.1, or around 7.4%, to $74.46 a barrel by 0843 GMT after hitting an intraday high of $78.50, the highest since January 27.

US West Texas Intermediate crude was up $5.1, or 7.5%, at $73.15 a barrel after hitting a high of $77.62, its highest level since January 21.

Friday’s gains were the largest intraday moves for both contracts since 2022, after Russia’s invasion of Ukraine caused a spike in energy prices.

Israel said it targeted Iran’s nuclear facilities, ballistic missile factories and military commanders on Friday at the start of what it warned would be a prolonged operation to prevent Tehran from building an atomic weapon.

Iran’s nuclear facility in Natanz was damaged, the country’s atomic energy organisation said in a statement, but investigations have not shown any radioactive or chemical contamination outside the site.

The primary concern was around whether the latest developments would affect the Strait of Hormuz, said SEB analyst Ole Hvalbye. The key waterway had been at risk of impact from increased regional volatility previously but had not been affected so far, Hvalbye said.

There was also no impact to oil flow in the region so far, he added.

About a fifth of the world’s total oil consumption passes through the strait, or some 18 to 19 million barrels per day (bpd) of oil, condensate and fuel.

Under a worst case scenario, JPMorgan analysts said on Thursday that closing the strait or a retaliatory response from major oil producing countries in the region could lead to prices surging to the $120-130 a barrel range, nearly double their current base case forecast.

The $10 a barrel price gain in the past three days had yet to reflect any drop in Iranian oil production, let alone an escalation that could involve disruption to energy flows through the Strait of Hormuz, Barclays analyst Amarpreet Singh said in a note.

US Secretary of State Marco Rubio called Israeli strikes against Iran a “unilateral action” and said Washington was not involved while also urging Tehran not to target US interests or personnel in the region.

“The key question now is whether this oil rally will last longer than the weekend or a week - our signal is that there is a lower probability of a full-blown war, and the oil price rally will likely encounter resistance,” said Janiv Shah, analyst at Rystad.

“Fundamentals show nearly all Iranian exports going to China, so Chinese discounted purchases would be most at risk here. OPEC+ spare capacity can provide the stabilizing force,” he added.

In other markets, stocks dived and there was a rush to safe havens such as gold and the Swiss franc.

“A key question is whether the Iranian retaliation will be limited to Israel or if the leadership will seek to internationalize the cost of tonight’s action by targeting bases and critical economic infrastructure across the wider region,” RBC Capital analyst Helima Croft said in a note.