Oil prices climbed sharply again on Thursday as global markets priced in heightened geopolitical risk linked to escalating tensions between the United States and Iran, particularly fears over a possible U.S. military strike that could disrupt crude supplies from a key oil-producing region. Brent crude futures rose above $70 per barrel for the first time in months, while U.S. West Texas Intermediate also moved higher, extending gains built over several sessions.
Escalating U.S.–Iran tensions: Oil markets reacted strongly to warnings from U.S. leadership about potential military options against Iran, with the presence of a U.S. carrier strike group and heightened rhetoric adding to supply-risk premiums. Iran is a significant crude producer within OPEC, and any potential disruption to its exports or regional shipping routes, especially the Strait of Hormuz, through which a large share of global oil flows, could tighten global supply.
Risk of supply disruption: Traders are increasingly concerned that conflict or military action could affect Iran’s oil output or interrupt traffic through critical chokepoints, which would reduce available global supply and push prices higher.
Broader risk sentiment: The geopolitical risk premium has been building alongside other market pressures, including earlier winter-related production disruptions and broader macroeconomic volatility, reinforcing crude’s appeal relative to safe assets.
The move in oil came in a session that also saw significant swings in other markets, reflecting investor caution around global economic and political developments.
