The price of oil reached a record level after Israel's attack on Iran

Oil prices rose more than 3% after Israel launched an attack on Iran, raising concerns of the war spreading to the Middle East. Israel launched a limited military strike against Iran and is currently assessing the effectiveness and damage caused. The operation was carried out in the early hours of Friday morning local time.

Both oil benchmarks pared gains after initially expanding more than 3% on news of Iran explosions. Global benchmark Brent traded 1.73% higher at $88.62 a barrel after hitting $90 earlier, while West Texas Intermediate rose 1.75% to $84.1 a barrel.

Gold prices rose to a new all-time high of 2,411.09 an ounce, while the yen strengthened 0.45% to 153.93 against the US dollar.

Iran's Fars news agency reported that explosions were heard near the airport in Isfahan and that flights to Tehran, Isfahan and Shiraz airports were suspended. A Telegram channel linked to the Islamic Revolutionary Guard Corps said there were no explosions on the ground in Isfahan and that they were caused by Iran's defenses. The country's armed forces also said nuclear facilities in Isfahan province were 'in full security'.

Currently the major risk to the markets in the expansion of the war in the Middle East is that oil exports from the Arabian Gulf will be cut off. The region is responsible for more than 20 million barrels of oil per day.

A disruption, or closure, of the Strait of Hormuz, a key point between Iran and Oman through which a fifth of global oil production passes each day, would push prices higher.