Crude oil prices staged a sharp rebound on Wednesday, driven by escalating geopolitical tensions between the United States and Iran.
US President Donald Trump warned in a Fox News interview that Iran was "going to get a beating" following an attempted attack on US forces, signaling a potential end to the recent de-escalation phase.
3% to $85.53. The surge marks a significant reversal from the previous week, when Brent had slid below $71 as traders priced in a potential ceasefire and easing of shipping risks in the Strait of Hormuz.
The remarks immediately reignited fears of supply disruption in the Persian Gulf, reversing the sentiment that had pushed prices to multi-month lows earlier in the month.
Brent crude jumped 7.5% to $84.58 per barrel, while US West Texas Intermediate (WTI) rose 6.3% to $85.53.
The surge marks a significant reversal from the previous week, when Brent had slid below $71 as traders priced in a potential ceasefire and easing of shipping risks in the Strait of Hormuz. The rapid repricing reflects market anxiety over the potential for renewed strikes on Iranian infrastructure or shipping lanes, which could disrupt a significant portion of global oil flows.
The development underscores the fragility of the recent calm in the region.
Just days ago, markets were digesting reports that US-Iran talks had advanced, leading to a unwind of the geopolitical risk premium. However, the latest escalation suggests that diplomatic progress remains tenuous.