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Oil prices rose on Wednesday after US President Donald Trump scolded Iran in a Truth Social post following tit-for-tat strikes between the US and Iran overnight and as market data showed a larger-than-expected drawdown in US crude inventories.
Brent crude futures climbed $1.45, or 1.6%, to $92.90 a barrel, while US West Texas Intermediate crude rose $1.80, or 2%, to $90 a barrel.
“They’ve taken too long to negotiate a deal that would have been great for them, now they will have to pay the price!!!” Trump said on Truth Social.
Oil prices jumped after the post, having traded more or less steady from the previous close for much of the European morning session.
While diplomatic efforts remain ongoing, the latest military exchanges have reintroduced a geopolitical risk premium into oil markets.
— Priyanka Sachdeva, senior market analyst at Phillip Nova.
“Oil prices have shifted from anxiety to apathy and back again amid renewed skirmishes between the US and Iran,” Phil Flynn, senior market analyst at The Price Futures Group said.
Trump said he was close to ordering new strikes against Iranian power plants and bridges as Iran was taking too long to make a deal, according to Fox News.
“The hope for a deal has kept oil prices under pressure in recent days, although flows through the Strait (of Hormuz) remain restricted. Obviously the market now awaits what US President Trump will do next,” UBS analyst Giovanni Staunovo said.
In what could further complicate talks, the UN nuclear watchdog’s 35-nation board of governors passed a US-backed resolution on Wednesday telling Iran to declare its remaining enriched uranium stocks and let inspectors verify them.
The US military struck Iranian targets after Trump vowed on Tuesday to respond to the downing of a US Apache attack helicopter.
Later in the day, a suspected missile strike on a tanker off the coast of Oman led to two crew members missing and one injured, maritime officials said.
“While diplomatic efforts remain ongoing, the latest military exchanges have reintroduced a geopolitical risk premium into oil markets,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Tehran, meanwhile, said it would resume hostilities if Israel continued to attack the Hezbollah militia in Lebanon.
Israel’s refusal to end its campaign against Iran-backed Hezbollah has helped hinder Trump’s efforts to extend a tenuous ceasefire in the wider US-Israeli war with Iran into a durable settlement.
Global stock draws are underpinning prices, but lower Chinese crude oil imports are helping to keep a ceiling on prices, PVM analyst Tamas Varga said.
A limited flow of shipping through the Strait of Hormuz could also be capping prices, he said, as some ships transit, but traffic remains significantly below pre-war levels.
Iran has continued to block most shipping through the Strait, which normally carries a fifth of the world’s crude oil and liquefied natural gas, while Washington has imposed its own blockade of Iranian ports.
US energy secretary Chris Wright said on Tuesday that ship traffic in the Gulf and oil exports through the Strait were rising even as Washington and Tehran struggle to reach a deal to end their more than three-month-old war. Soaring energy prices pushed US consumer inflation to increase at its fastest pace in three years in May, signalling that the Federal Reserve could keep interest rates unchanged into 2027.
The hope for a deal has kept oil prices under pressure in recent days, although flows through the Strait (of Hormuz) remain restricted. Obviously the market now awaits what US President Trump will do next.
— UBS analyst Giovanni Staunovo
Reuters
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