Crude oil prices jumped sharply on Wednesday as a fragile three-day ceasefire between the United States and Iran collapsed, giving way to renewed missile exchanges in the Middle East.
The abrupt end to the diplomatic pause has reignited fears of sustained supply disruptions, pushing energy markets higher after a brief period of calm.
Iran had previously warned of forceful responses to tankers deviating from approved routes in the Strait of Hormuz, adding a layer of shipping risk to the geopolitical backdrop.
Brent crude and WTI benchmarks both posted significant gains in the session, reflecting the market’s rapid repricing of geopolitical risk.
The rally extends the momentum from earlier in the week, when crude recorded its largest two-day percentage gain in four months amid escalating tensions. Traders are now pricing in a higher probability of prolonged conflict, which could impact shipping routes and production facilities in the region.
The breakdown of the ceasefire follows weeks of heightened volatility in energy markets.
Iran had previously warned of forceful responses to tankers deviating from approved routes in the Strait of Hormuz, adding a layer of shipping risk to the geopolitical backdrop. The renewed fighting threatens to undermine any near-term stability in global oil supply chains, particularly if key infrastructure comes under direct threat.