U.S. intelligence agencies have assessed that Israel is actively preparing for a potential strike on Iranian nuclear facilities, raising fears of a regional conflict as President Donald Trump's administration struggles to finalize a new nuclear agreement with Tehran. The development, first reported by CNN, triggered volatility in global energy markets and rattled diplomatic efforts aimed at curbing Iran's uranium enrichment.
The intelligence includes intercepted Israeli communications, observable troop movements, and recent Israeli air exercises. "The chance of an Israeli strike on an Iranian nuclear facility has gone up significantly in recent months," a source familiar with the intelligence told CNN. The source added that the probability increases if the U.S.-Iran deal fails to eliminate Iran's enriched uranium stockpile.
Brent crude and West Texas Intermediate (WTI) spiked sharply following the report, with WTI rising as much as 3.5% to briefly exceed $64 a barrel before paring gains. "Either the impact on the oil market in case of an attack is assumed to be low, or the probability for an attack is assumed to be low," said Bjarne Schieldrop, chief commodities analyst at SEB AB. This "is not much when we are talking bombs in the Middle East major oil producing region."
U.S. Special Envoy to the Middle East Steve Witkoff emphasized Washington's demand for Iran to halt enrichment entirely. "We cannot allow even one percent of an enrichment capability... Everything begins from our standpoint with a deal that does not include enrichment," he said. Iranian officials have rejected this, with Foreign Minister Abbas Araghchi stating on X, "Enrichment in Iran, however, will continue with or without a deal."
Supreme Leader Ayatollah Ali Khamenei called the U.S. demands "excessive and outrageous." Tehran has long insisted that enrichment is a sovereign right under the Nuclear Non-Proliferation Treaty. Araghchi described the most recent round of talks on May 11 as "difficult but useful," and said Oman would soon announce the timing of the next round.
Trump, speaking to reporters earlier this week, warned that his offer of diplomacy with Iran "won't last forever," citing a return to maximum pressure-including a complete halt to Iranian oil exports-if negotiations collapse.
Trita Parsi, executive vice president of the Quincy Institute, told Newsweek that Iran is unlikely to accept a full freeze on enrichment: "The cost of restarting enrichment-even if the U.S. violates the deal and causes its collapse-is so high that the proposal gives me very little confidence."
Markets responded not only to the CNN report but also to geopolitical signals out of Tehran. Earlier this week, Khamenei said publicly that he does not expect the ongoing talks to produce a positive result. Goldman Sachs analysts estimate that Iran has increased oil exports by approximately 1 million barrels per day in recent years, despite sanctions.
"If you remove a million barrels a day from Iran, this could represent an upside of about $8 a barrel to the crude oil price," Samantha Dart, co-head of global commodities research at Goldman Sachs, said on Bloomberg Television.
The Israeli government has not confirmed the report, and no official decision to strike has been disclosed.
