Oil Prices Hit Over 5-Month Highs As Israel‑Iran Crisis Escalates, Trump Warning Keeps Markets On Edge

Oil prices climbed in Asia trading hours on Wednesday as the conflict between Israel and Iran intensified amid U.S. President Donald Trump’s threats of military action against Tehran.

Brent crude futures gained 0.4% at $76.78 per barrel, while U.S. West Texas Intermediate crude prices rose 0.4% at $73.57 per barrel at 11:54 pm ET. Both contracts hit a five-month high.

According to a BBC report, Iran and Israel exchanged missiles for the sixth day in a row amid Trump’s calls for Iran’s “unconditional surrender.”

The U.S. President also warned that he knew the location of Iran’s Supreme Leader, Ayatollah Ali Khamenei, and said, “We now have complete and total control of the skies over Iran” without specifying whether U.S. military aircraft were operating in the country or not.

White House officials reportedly said it has not been decided whether the U.S. will attack Iran yet.

The heightened tensions have raised concerns about whether Iran will attack the Strait of Hormuz, which could threaten about one-fifth of the world’s oil supply.

The United Kingdom Maritime Trade Operations warned earlier this week that electronic interference is affecting ships' navigation systems. Two oil tankers reportedly collided on Tuesday.

While Iran produces more than 3% of the world’s oil output, other countries in the OPEC+ producer group, including Russia and Saudi Arabia, have spare capacity that could help offset the supply shock if Iranian oil exports pause entirely.

According to a Reuters report, oil investors are also looking at the Federal Reserve’s discussions over whether to alter the benchmark interest rates.

Tony Sycamore, a market analyst with IG, reportedly said that the Federal Reserve could sound more dovish as it did following the outbreak of the conflict in Gaza.

The United States Oil Fund (USO) has gained 7.1%, while ProShares Ultra Bloomberg Crude Oil (UCO) is down 2.7% this year.

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