Oil prices surged on , reaching a six-month high as escalating tensions between the U.S. And Iran fueled concerns about potential supply disruptions. Brent crude, the global benchmark, climbed above $71 per barrel, marking its highest level since .
The price increase reflects a growing risk premium in the market, driven by fears of military conflict. Both the U.S. And Iran are engaged in military posturing, even as diplomatic efforts to resolve disagreements over Tehran’s nuclear program continue. Brent crude was up 1.90% at $71.69 a barrel as of GMT, while West Texas Intermediate (WTI) crude rose 2.21% to $66.49 a barrel. Other crude benchmarks also saw increases: Murban Crude rose to $72.00, up 1.80%, and Gasoline increased by 2.02% to $2.008.
Analysts suggest that while a full-scale effort to change the Iranian leadership appears unlikely – given past U.S. Experiences in Afghanistan and Iraq – a limited military intervention remains a possibility. Joachim Klement, a research analyst at Panmure Liberum, indicated that the most probable scenario involves a bombing campaign targeting Iran’s nuclear capabilities or military infrastructure. “As we have seen in the case of Venezuela, extracting the leader of a country may not mean regime change,” Klement noted, suggesting that a short intervention without ground troops is the most likely course of action.
The potential for disruption to oil supply is the primary driver of the price increase. Iran asserts control over the Strait of Hormuz, a critical shipping lane through which approximately 20% of global oil supplies transit. While analysts believe Iran is unlikely to block the Strait of Hormuz in the event of a limited U.S. Strike, the heightened risk of conflict is already reflected in oil prices.
President Donald Trump, speaking at a meeting of the U.S.-led Board of Peace, indicated that the U.S. “may have to take it a step further” regarding a potential attack on Iran, but also added, “we may not.” He suggested a decision would be forthcoming within the next ten days.
The surge in oil prices comes as the U.S. Has been building up its military presence in the Middle East, including the deployment of aircraft carriers and fighter jets. The U.S. Navy’s Nimitz-class aircraft carrier USS Abraham Lincoln and Arleigh Burke-class guided-missile destroyer USS Frank E. Petersen Jr. Conducted a photo exercise in the Arabian Sea on .
Despite the recent gains, oil prices remain below levels seen a year ago. However, the current increase could exacerbate seasonal pressures on gasoline prices. Patrick de Haan, head of petroleum analysis at GasBuddy, noted that gasoline demand typically rises in the spring as travel increases, potentially leading to higher prices at the pump.
The impact of higher oil prices extends beyond consumers. Crude oil is a key input into a wide range of products, from gasoline and diesel fuel to plastics and other petrochemicals. Increased oil prices can therefore contribute to broader inflationary pressures in the economy.
Several other crude oil benchmarks also experienced price increases. Murban Crude rose to $72.00, up 1.27%, while Louisiana Light crude fell slightly to $64.58, down 1.25%. Bonny Light crude decreased to $78.62, down 2.84%, and the OPEC Basket decreased to $66.62, down 2.12%. Western Canadian Select rose significantly, increasing by 5.59% to $52.70.
The situation remains fluid, and further escalation of tensions could lead to more substantial increases in oil prices. Market participants will be closely monitoring developments in the coming days and weeks for any signs of de-escalation or further military action.
