Israel-Iran Conflict Enters Day 6: Markets Show Cautious Resilience Despite Energy Sector Disruptions

Published At: June 19, 2025 by Rachel Tan

Conflict Status Update

The Israel-Iran conflict has escalated significantly on Day 6, with both nations expanding their military operations beyond initial targets. Israel conducted precision airstrikes on Tehran, targeting military installations and nuclear-related facilities including a Revolutionary Guards-linked university and infrastructure in District 18. Iran retaliated with hypersonic Fattah-1 missiles and sustained ballistic missile barrages, causing explosions over Tel Aviv and significant damage to residential areas in Ramat Gan.

Casualty figures have risen dramatically, with independent human rights organizations reporting at least 585 Iranian deaths including 239 civilians, while Israeli casualties stand at 24 killed and 592 wounded as of June 16. The conflict has expanded beyond military targets to critical infrastructure, with Israeli strikes devastating Iran's energy sector including the world's largest gas field at South Pars and multiple Tehran refineries. Iranian missiles have damaged Israel's Haifa oil refinery, forcing its shutdown.

US involvement remains measured, with President Trump increasing regional military deployments while calling for Iran's "unconditional surrender" but avoiding direct military action. European diplomatic efforts continue with nuclear talks scheduled in Geneva on Friday, though Iran has indicated it will not negotiate until completing its retaliation campaign. Embassy evacuation preparations underscore the conflict's escalating nature.

Energy Markets Analysis

Energy markets have experienced severe disruption with oil prices surging across all benchmarks. Brent crude reached $75.52 per barrel as of June 18, while WTI trading data shows $65.99 per barrel, though this figure reflects delayed reporting from June 9 and current levels are likely significantly higher given recent developments.

The most dramatic impact centers on Iran's energy infrastructure, where Israeli strikes on the South Pars gas field have eliminated up to two-thirds of Iran's domestic gas supply and halted offshore production. The targeting of Phase 14 refineries and offshore platforms represents unprecedented disruption to global LNG markets. Tehran's refinery complex has suffered extensive damage, reducing Iran's oil exports to minimal levels and creating immediate supply shortfalls.

Israel's energy sector faces parallel disruption with the closure of two major offshore gas fields, Leviathan and Karish, reducing domestic gas supply by nearly two-thirds. The nation has shifted to coal and fuel oil for power generation, adding to global demand pressures.

The critical Strait of Hormuz remains open but shipping traffic has declined as maritime groups implement heightened security protocols. The International Maritime Organisation reports no confirmed closures while advising enhanced security assessments. Insurance premiums and freight rates have surged as vessels reroute around potential conflict zones, creating supply chain bottlenecks that extend far beyond the immediate region.

Natural gas markets face particular pressure given the scale of Iranian production losses, with global prices surging amid fears of prolonged supply disruptions. The targeting of energy infrastructure suggests both sides view these assets as legitimate military objectives, raising concerns about further escalation targeting remaining facilities.

Financial Market Response