Oil prices extended their rally on Wednesday as escalating military tensions between the United States and Iran heightened concerns over global energy supplies.
Brent crude futures rose 58 cents, or 0.7%, to $85.31 a barrel, while U.S. West Texas Intermediate (WTI) gained 35 cents, or 0.4%, to $79.69 a barrel in early trading.
The gains followed Tuesday’s two percent surge, which pushed both benchmarks to their highest levels in about a month after renewed attacks further disrupted shipping through the Strait of Hormuz.
Before the outbreak of the U.S.-Israeli conflict with Iran, roughly one-fifth of the world’s oil and liquefied natural gas shipments passed through the strategic waterway.
The latest spike in prices came after President Donald Trump ordered a renewed naval blockade of all Iranian ports, while Tehran responded by launching attacks on U.S. military assets across the region.
Market analysts say the worsening conflict is keeping traders on edge, although many are waiting to see whether either side signals a willingness to de-escalate.
“Brent and WTI have moved higher as the attacks intensify, but the pace of the rally may slow while the market watches for any shift in position from Washington or Tehran,” said June Goh, Senior Oil Market Analyst at Sparta Commodities.
The U.S. military announced early Wednesday that it had launched another wave of strikes aimed at degrading Iranian capabilities used to target commercial shipping in the Strait of Hormuz.
Analysts say the physical oil market remains relatively well supplied for now, but warned that any further disruption could quickly tighten supplies and push prices even higher.
“While global oil supplies remain adequate, any additional escalation involving the Strait of Hormuz or tougher sanctions on Iranian exports could significantly increase risk premiums,” said Priyanka Sachdeva, Senior Market Analyst at Phillip Nova.
Iran says it has once again closed the Strait of Hormuz after fighting with the United States resumed last week, shattering the fragile ceasefire reached in June following months of conflict.
The renewed hostilities have also cast doubt on whether last month’s memorandum of understanding between the two countries can still serve as a pathway toward a lasting peace.
President Trump has continued to raise the stakes, warning that Iran’s energy infrastructure could become the next target if Tehran refuses to return to negotiations.
“I’ll save the energy targets for last, but ultimately we’ll hit energy targets,” Trump said during an interview with Fox News.
Iran, meanwhile, said its military launched drone attacks against U.S. forces stationed at Jordan’s Azraq air base. There was no immediate confirmation from the Pentagon.
The Islamic Revolutionary Guard Corps also claimed responsibility for strikes targeting weapons depots and military storage facilities in Bahrain and Kuwait. Reuters said it could not independently verify those claims.
With tensions showing no signs of easing, investors remain focused on developments in the Middle East, where any further disruption to shipping lanes or oil production could trigger another sharp rise in global crude prices.
