Oil Accelerated Gains After Trump's Demand For Iran Capitulation
- 18.06.2025, 9:50
The price jumped 4% at once.
Oil prices rose 4% on fears the Iran-Israel conflict could disrupt supplies. US President Donald Trump demanded Iran's "unconditional surrender" and warned of a possible strike against the country's leader, Ayatollah Ali Khamenei.
It was reported by Bloomberg .
Brent crude oil is at $76.70 a barrel, while West Texas Intermediate crude is at $75.20 a barrel.
Brent crude prices have risen about $10 a barrel in the past two weeks. Israel launched attacks on Iran last week Speculation that the U.S. may join the conflict has heightened fears of supply disruptions in the Middle East.
Three officials said the U.S. military was sending additional fighter jets to the region to bolster its forces .
"Trump's demand for Iran's 'unconditional surrender' and threats against its supreme leader signal that diplomacy is impossible," said Charu Chanana, chief investment strategist at Saxo Markets Ltd. in Singapore. "The worst-case scenario - a blockade of Hormuz - could drive prices up sharply," she added.
Price Outlook
Analysts said the market is mainly concerned about supply disruptions in the Strait of Hormuz, through which a fifth of the world's seaborne oil is transported.
Iran is OPEC's third-largest oil producer, producing about 3.3 million barrels of crude a day, but spare capacity from producers in the Organization of the Petroleum Exporting Countries and its allies could easily cover that volume.
Analysts at Fitch said they expect the geopolitical risk premium in oil prices to remain around $5-10.
"A significant disruption to Iran's production or export infrastructure would increase upward pressure on prices. However, even in the unlikely event that all Iranian exports are lost, they could be replaced by the spare capacity of OPEC+ producers... about 5.7 million barrels per day," Fitch analysts said in a client note.
Iran's crude export infrastructure has not yet been affected, and most of the impact has been on shipping. The Middle East produces about a third of the world's oil, and a wider conflict could drive prices even higher.
The hostilities have rattled global markets, with investors seeking refuge in assets such as gold and oil volatility rising to a three-year high. Brent's fast spread rose sharply, signaling fears of supply cuts, and options became more optimistic than they have been since Russia invaded Ukraine in 2022.