Oil prices jumped sharply after CNN reported that new U.S. intelligence indicates Israel may be preparing to strike Iranian nuclear facilities.

Brent crude climbed above $66 per barrel, while West Texas Intermediate (WTI) surged as much as 3.5% before easing slightly.

However, CNN noted that Israeli leaders have not yet made a final decision on carrying out the strikes, citing unnamed officials.The geopolitical tensions come amid mixed signals on Iran-U.S. nuclear negotiations, which have so far failed to yield progress.

An Israeli strike could derail talks and further destabilize the Middle East, a region that supplies about one-third of the world’s crude oil.Robert Rennie, head of commodity and carbon research at Westpac Banking Corp., said, “This is the clearest sign yet of how high the stakes are in the US-Iran nuclear talks and the lengths Israel may go to if Iran insists on maintaining its commercial nuclear capabilities.”

He added, “Crude will maintain a risk premium as long as the current talks appear to be going nowhere.”The CNN report also briefly boosted traditional safe-haven currencies like the Swiss franc and Japanese yen before those gains moderated.

Israel has long considered targeting Iran’s nuclear program, though concerns remain about how many sites are well-protected against attacks.

Earlier plans were believed to have been tempered by comments from then-President Joe Biden following last year’s conflict flare-ups.Despite geopolitical concerns, expectations remain that OPEC and allies will increase production in the second half of the year. U.S. shale oil output continues to have growth potential but requires prices above $50 per barrel, according to ConocoPhillips CEO.

Iran’s Supreme Leader Ali Khamenei recently expressed skepticism about the latest nuclear negotiations with the U.S., signaling continued uncertainty ahead. Bloomberg Intelligence warns that if sanctions on Iran’s oil exports are lifted, WTI prices could plunge as low as $40 per barrel.