Oil prices rise 1% as Iran crisis disrupts Middle East supply

On Wednesday, oil prices climbed by 1% as the ongoing conflict between the U.S. and Israel against Iran disrupted oil supplies in the Middle East. However, the increase in prices was not as strong as in previous days, especially after U.S. President Donald Trump suggested that the U.S. Navy could escort ships through the Strait of Hormuz. Brent crude oil saw an increase of $1.17, or 1.4%, reaching $82.57 a barrel by 0408 GMT, following its highest closing price since January 2025 on Tuesday. Meanwhile, U.S. West Texas Intermediate crude rose by 72 cents, or 1%, to $75.28, after also hitting its highest price since June. Over the last two sessions, both types of crude oil have risen by about 5% or more. Phillip Nova's senior market analyst, Priyanka Sachdeva, explained that geopolitical issues are currently more influential on oil prices than usual factors like inventory data, U.S. economic figures, or OPEC comments. She noted that important things to monitor in the near future include actual export data from the Gulf, any confirmed incidents involving tankers, movements of the U.S. Navy, and the tone of Iran's responses. On Tuesday, Israeli and U.S. forces attacked targets in Iran, which led to Iranian strikes on energy facilities in a region that produces nearly a third of the world's oil. Iraq, the second-largest oil producer in the Organization of the Petroleum Exporting Countries, has reduced its output by almost 1.5 million barrels per day, about half of its production, due to storage issues and limited export routes, according to officials who spoke to Reuters. They warned that Iraq might have to halt its nearly 3 million barrels per day of production within days if exports do not start again. Iran has also targeted tankers in the Strait of Hormuz, which is a crucial route for about 20% of global oil and liquefied natural gas. Currently, traffic through the Strait is nearly at a standstill. Trump mentioned that the U.S. Navy might begin to escort oil tankers through the Strait of Hormuz if needed. He also revealed that he had instructed the U.S. International Development Finance Corporation to offer political risk insurance and financial support for maritime trade in the Gulf. ING analysts noted that while these guarantees are positive news, it will take time to implement them. They added that naval escorts would be beneficial, but that effort will also require time to establish.