Global oil markets surged on Wednesday as the escalating conflict involving the United States, Israel, and Iran disrupted crude supply from one of the world’s most critical energy-producing regions.
Both Brent crude and US West Texas Intermediate (WTI) reached multi-month highs, intensifying concerns over supply security and energy price stability.
By 0659 GMT, Brent crude had climbed $2.67, or 3.3 per cent, to $84.07 per barrel, marking its highest level since January 2025.
Meanwhile, WTI rose $2.24, or 3 per cent, to $76.80 per barrel, building on gains from the previous trading session.
Over the past two days, both benchmarks have surged by roughly 5 per cent or more, reflecting heightened market anxiety over the conflict’s potential to constrict global oil supply.
“The primary near-term driver for oil prices remains the U.S.-Iran conflict,” said Kelvin Wong, senior market analyst at OANDA.
He noted that the absence of any clear signals of de-escalation has kept markets in a bullish momentum, with traders closely watching military and diplomatic developments in the region.
The latest price spikes followed Israeli and US strikes on Iranian targets on Tuesday, which prompted retaliatory attacks on energy infrastructure across Iran.
The region, home to nearly a third of global oil production, has long been considered a linchpin in international energy security, making disruptions particularly impactful on global markets.
Iraq, OPEC’s second-largest crude producer, reportedly reduced output by nearly 1.5 million barrels per day, citing storage constraints and blocked export routes.
Government officials have warned that, if exports fail to resume, total production could fall by as much as 3 million barrels per day in the coming days.
The Strait of Hormuz, a strategic chokepoint through which roughly one-fifth of the world’s oil and liquefied natural gas shipments transit, has effectively closed due to Iranian attacks on commercial tankers.
This has heightened fears of prolonged supply interruptions and added to upward pressure on global prices.
In response, U.S. President Donald Trump suggested that the US Navy could begin escorting oil tankers through the Strait of Hormuz to maintain the flow of energy supplies.
He also directed the U.S. International Development Finance Corporation to provide political risk insurance and financial guarantees to support maritime trade in the Gulf.
While analysts described these measures as reassuring, they cautioned that implementation would take time and may not immediately calm oil markets.
Countries and companies reliant on Middle Eastern oil are already scrambling for alternatives.
India and Indonesia have begun seeking other sources of energy, while some Chinese refineries have either temporarily shut down or accelerated scheduled maintenance due to uncertainties over crude availability.
In the United States, crude inventories unexpectedly rose by 5.6 million barrels last week, according to American Petroleum Institute data, far exceeding analyst projections of a 2.3 million barrel increase.
Government-confirmed figures are expected later Wednesday to further clarify domestic supply conditions.
Market watchers have emphasised that the situation remains fluid.
“Mitigation efforts have not altered the prevailing bullish trend,” Kelvin Wong noted, highlighting that WTI continues to hold above key short-term support levels between $73.40 and $70.70 per barrel.
Analysts also cautioned that, unless diplomatic or military tensions subside in the near term, crude prices could remain elevated, with knock-on effects for global inflation and energy-dependent industries.
As diplomatic negotiations stall and military operations intensify, global energy markets remain on edge.
Traders are watching developments in the Middle East closely, recognizing that even minor escalations could trigger further disruptions in oil supply and exacerbate already volatile markets.
