Oil prices surged sharply on Tuesday amid escalating tensions between Israel and Iran, raising concerns that the conflict could broaden to involve the United States.
Brent North Sea crude and West Texas Intermediate (WTI), the world’s leading oil benchmarks, rose by 4.4% and 4.3% respectively, closing at $76.45 and $74.84 per barrel following the spike. Early trading on Wednesday saw further modest gains, with both benchmarks up approximately 0.5% as of 03:30 GMT.
The price rally was driven by US President Donald Trump’s escalating rhetoric demanding “unconditional surrender” from Tehran, heightening fears of potential US military intervention.
Meanwhile, US equity markets responded negatively to the geopolitical uncertainty. The S&P 500 index fell 0.84%, while the tech-heavy Nasdaq Composite dropped 0.91% during overnight trading.
The conflict intensified as Israel launched airstrikes on multiple Iranian oil and gas facilities since Friday, targeting sites including the South Pars gas field, the Fajr Jam gas plant, the Shahran oil depot, and the Shahr Rey oil refinery.
Although global energy supplies have remained largely uninterrupted to date, markets remain jittery amid the risk of escalation—especially the possibility of direct US involvement in Israel’s military operations.
On Tuesday, President Trump escalated tensions further by threatening military action against Iran’s uranium enrichment facility at Fordow. In a post on his social media platform Truth Social, Trump issued a pointed warning to Iranian Supreme Leader Ali Khamenei, stating the US knows his whereabouts but will refrain from targeting him “at least for now,” signaling a thinly veiled threat.
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