Brent crude oil surged past US$70 a barrel on Thursday, its highest level in nearly five months, as geopolitical tensions between the United States and Iran escalated, raising concerns over potential disruptions to global energy supplies.
The international benchmark, Brent North Sea crude, jumped 2.4 percent to US$70.06 a barrel in London morning deals, while U.S. West Texas Intermediate (WTI) rose 2.6 percent to US$64.82 a barrel. Traders attributed the gains to heightened risk premiums in response to statements by former U.S. President Donald Trump, who warned of possible military action against Iran.
In posts on his social media platform, Trump urged Iran to negotiate a “fair and equitable” deal over its nuclear programme, warning that the next attack would be “far worse” if Iran failed to comply. His remarks were widely interpreted as a threat of potential U.S. strikes on Iranian nuclear targets, a scenario that could disrupt the flow of crude from the Middle East.
Iranian officials responded swiftly. Foreign Minister Abbas Araghchi said Tehran would react “immediately and forcefully” to any military operation, reinforcing fears that the Strait of Hormuz a key transit hub through which roughly 20 percent of the world’s traded oil passes could be affected.
“The market is pricing in the risk of supply disruptions,” said Derren Nathan, head of equity research at Hargreaves Lansdown. “Even the possibility of conflict can impact Iran’s daily output of around three million barrels and shipping through the Strait of Hormuz.”
Brent’s rise to US$70 marked a notable milestone, reflecting not only geopolitical risk but also the ongoing tightness in global oil markets. Oil prices have been supported in recent months by rising demand forecasts, limited spare capacity in major producing regions, and cautious production strategies among OPEC members.
While the spike represents a four-month high, analysts warned that markets could remain volatile in the near term. “Prices could retrace if diplomatic dialogue gains traction, but risk premiums will stay elevated as long as tensions persist,” said Neil Walters, an analyst at Britannia Global Markets.
The escalation comes amid a broader context of recovering energy demand following a series of mild global economic slowdowns. Energy analysts note that investors are increasingly sensitive to political developments in the Middle East, given the region’s outsized role in oil exports and its limited spare capacity to absorb shocks.
Brent crude’s price rally is likely to ripple across other markets. Higher crude prices increase costs for fuel-importing countries, potentially feeding into broader inflation pressures. Global shipping and transportation sectors are also exposed, with rising fuel prices affecting freight costs and supply chains.
Meanwhile, U.S. and European markets are watching developments closely, balancing geopolitical risk against emerging signals that Washington may pursue negotiation over immediate military action. Oil trading volumes remained robust on Thursday, reflecting investor caution and rapid adjustments to news flow.
Market observers emphasized that even in the absence of actual conflict, “words alone” can move oil prices significantly. “Geopolitical uncertainty is a key driver of energy markets,” said Derren Nathan. “Investors are keenly aware that any disruption in Iranian exports could tighten an already fragile supply-demand balance.”
With Brent trading above US$70 and WTI near US$65, analysts said global markets would remain highly sensitive to developments in Iran over the coming weeks. Any escalation or easing of tensions is likely to be reflected almost immediately in oil prices, highlighting the vulnerability of the global energy system to geopolitical shocks.
