(Bloomberg) — Oil jumped on a report from CNN that US intelligence suggests Israel is making preparations to strike Iranian nuclear facilities.

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West Texas Intermediate futures surged as much as 3.5% to $64.19 a barrel. It isn’t clear that Israeli leaders have made a final decision on whether to carry out the strikes, CNN said, citing unnamed officials.

Oil prices have been volatile since last week on mixed headlines about the fate of Iran-US talks, which could pave the way for more barrels to return to a market that’s expected to be oversupplied later in the year. An attack by Israel would hinder any progress in those negotiations and add to volatility in the Middle East, which supplies about a third of the world’s oil.

“There’s a difference between proxy battles and symbolic strikes versus an unmitigated attack, which is what latest reports, if true, appear to potentially flag,” said Vishnu Varathan, head of macro for Asia ex-Japan for Mizuho Bank Ltd. Other conflicts between Israel and others “had a sense of greater restraint on both sides, especially given the involvement of, and coordination with, regional players alongside the US and Europe.”

Iran’s Supreme Leader Ali Khamenei on Tuesday said he didn’t think the latest effort to negotiate with the US would lead to a result. WTI prices could tumble as low as $40 a barrel if sanctions on the Islamic Republic’s oil exports are lifted, according to Bloomberg Intelligence.

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