Oil prices climbed by roughly 3% on Wednesday as tensions involving Iran, the US and Israel disrupted Middle East supply.
However, the rate of increase then slowed compared to previous sessions after US President Donald Trump indicated the US Navy could escort tankers through the Strait of Hormuz, reported Reuters.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Brent crude increased by $2.67, or 3.3%, to reach $84.07 per barrel (bbl) by 06:59 GMT, following a close on Tuesday that marked its highest level since January 2025.
US West Texas Intermediate (WTI) futures increased by $2.24, or 3%, to $76.8/bbl, having settled on Tuesday at their highest level since June.
Both benchmarks have gained around 5% or more over the last two trading sessions.
The latest price moves followed Israeli and US strikes on targets across Iran on Tuesday, which triggered Iranian attacks on energy facilities in a region that produces approximately one-third of the world’s oil.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataIran has also attacked tankers in the Strait of Hormuz, a corridor that carries roughly 20% of the world’s oil and liquefied natural gas, bringing traffic through the channel to a standstill.
Israeli and US strikes on sites in Iran have prompted further attacks across the Gulf.
An Islamic Revolutionary Guards Corp official stated the waterway had been shut and warned that any ship trying to pass through could be targeted, Iranian state media reported.
Iraq, the second-biggest crude producer in the Organisation of the Petroleum Exporting Countries, has reduced output by almost 1.5 million barrels per day (mbbl/d), roughly half its production. This was because of storage constraints and the absence of an export route, Reuters reported, citing undisclosed officials. They indicated the country may need to stop its production of around 3mbbl/d within days if there is no resumption of exports.
President Trump said that he had ordered the US International Development Finance Corporation to provide political risk insurance and financial guarantees for maritime trade in the Gulf.
Countries and companies have begun altering their purchasing plans and transport arrangements. India and Indonesia are seeking alternative energy sources, while some refineries in China are shutting down or advancing scheduled maintenance.
In the US, crude stocks increased by 5.6mbbl last week, market sources reported, citing figures from the American Petroleum Institute, outpacing analysts’ forecasts of a 2.3mbbl rise.
Oil prices are likely to stay high in the short term as traders assess potential supply risks through the Strait of Hormuz.
In a related scenario, Asian liquefied natural gas (LNG) prices have also risen, hitting their highest point since 2023 after the regional unrest led to a shutdown at the world’s largest LNG export facility in Qatar and halted traffic through the Strait of Hormuz, reported Bloomberg.
According to traders, spot LNG prices in Asia climbed to $25.4 per million British thermal unit, more than twice last week’s level.
