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The reaction in Middle East stock markets suggested investors were assuming a benign scenario, even as Iran intensified its missile attacks on Israel.

Based on the closing price of Brent crude on Friday, a 10% jump would send the global oil benchmark to nearly $85 per barrel.

Strikes stoke fears of escalating regional conflict that could shut down vital strait of Hormuz shipping route

Oil markets are reacting to the impact of a U.S. decision to directly enter the Iran-Israel conflict.

Oil prices briefly hit five-month highs as investors anxiously waited to see if Iran would retaliate against US attacks on its nuclear sites.

Brent crude futures were up $1.52 or 1.97 per cent to $78.53 a barrel as of 6am UK time. US West Texas Intermediate crude advanced $1.51 or 2.04 per cent to $75.35.

Rolling coverage of the latest economic and financial news

Oil prices could rise if Iran goes ahead with threat to shut down shipping in the strait of Hormuz

Rolling coverage of the latest economic and financial news