Brent crude prices climbed sharply on Wednesday as the United States and Saudi Arabia launched joint airstrikes against Iran-backed armed groups in Iraq, marking a significant escalation in the Middle East conflict.
The military action comes just days after a brief suspension of bombing campaigns, signaling that diplomatic efforts to secure an interim deal have stalled.
The market repricing was accelerated by reports that Iran has fired on commercial vessels in the Strait of Hormuz and targeted US bases in Jordan.
These direct attacks on shipping infrastructure and military assets have heightened fears of a prolonged supply disruption in one of the world's most critical energy chokepoints.
Traders are now pricing in a sustained risk premium as the window for a quick diplomatic resolution narrows.
This development follows a period of intense cross-border fighting, with Iran and the United States exchanging attacks over the past ten days despite ongoing mediation efforts.