Energy and mining stocks climbed on Friday as escalating conflict between Israel and Iran sent crude oil and gold prices sharply higher.
BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) rose 3.2% and 2.3% respectively.
Fresnillo PLC (LSE:FRES), the Mexico-focused precious metals miner, gained 1.4%, while Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) was up 1.8% as investors flocked to safe-haven assets.
The gains came amid widespread market turmoil after Israeli strikes hit dozens of Iranian military and nuclear targets, killing senior commanders and scientists. Iran responded by launching a wave of drones towards Israel, as both sides warned of prolonged hostilities.
Crude oil surged above $90 a barrel for the first time in months, with traders pricing in the risk of disruption to supply routes through the Strait of Hormuz. Meanwhile, gold touched $2,500 an ounce, reflecting heightened demand for traditional stores of value.
The Israeli operation, dubbed Rising Lion, was described by Prime Minister Benjamin Netanyahu as a direct attack on Iran’s nuclear and ballistic missile programmes. In response, Iran’s supreme leader vowed “severe punishment”.
With tensions threatening to spill across borders, risk appetite faded. But for energy producers and gold miners, the geopolitical shock translated into outsized gains as commodity prices surged.