Rising Middle East Tensions Push Oil Prices Higher and Threaten Global Supply
Oil prices rose in Asian trading on Wednesday after two days of sharp gains, as escalating tensions between the United States, Israel, and Iran kept supply disruption risks at the forefront of market sentiment.
As of 06:25 Saudi time, May Brent futures were up 1% at $82.21 per barrel, while WTI gained 0.7% to reach $75.07.
Both benchmarks had surged nearly 5% on Tuesday, with Brent briefly topping $85 — its highest level since July 2024.
Rising supply risks amid Middle East escalation
The current crisis erupted over the weekend when coordinated U.S.–Israeli strikes targeted Iranian forces, resulting in the death of Supreme Leader Ali Khamenei. Tensions deepened as further attacks hit Iran-linked facilities on Tuesday, prompting Tehran to intensify its military posture in the Gulf and issue warnings to global shipping companies.
Iran also targeted tankers passing through the Strait of Hormuz — a vital chokepoint handling about one-fifth of the world’s oil shipments — and vowed to strike any vessel crossing the strait.
This added a significant geopolitical risk premium to oil prices, further amplified by reports that Iraq began halting production at the Rumaila and West Qurna-2 fields, removing around 1.2 million barrels per day from output.
Trump moves to secure tanker routes
However, oil prices pulled back from earlier highs after U.S. President Donald Trump said the U.S. Navy would escort commercial vessels if necessary and pledged government-backed guarantees to ensure safe passage.
While these assurances were welcomed, ING analysts noted that such measures would not be implemented overnight.
International attempts to secure shipping lanes could help cap additional price spikes in the near term, even as military tensions continue to support the market.
