Trump signals tougher line on Iran, lifting global oil prices about 2%
International oil prices advanced on Wednesday as traders weighed escalating Middle East tensions alongside another drop in U.S. crude inventories, according to CoinDesk.
Brent crude traded around $92 a barrel and WTI near $90, with both benchmarks up roughly 2% on the day. The move followed U.S. President Trump's latest comments on Iran, which markets interpreted as a firmer stance that could further narrow the remaining diplomatic space between Washington and Tehran.
Supply and shipping risks in the Gulf remain central to the rally, with the Strait of Hormuz again in focus. Iran continues to limit some shipping activity in the corridor, and the United States has placed restrictions on vessels linked to Iranian ports. U.S. Energy Secretary Chris Wright said vessel traffic and crude exports in the Gulf have started to recover, but conditions have not returned to normal. Prolonged disruption in the strait, a key global energy transit route, could tighten crude supply and push transport costs higher, keeping a geopolitical risk premium embedded in prices.
Concerns have also intensified over the potential for further military escalation. Trump's latest remarks are viewed as tougher than earlier messaging, which had fueled speculation that a ceasefire or de-escalation might still be possible. Recent reports say the U.S. government is weighing additional military options aimed at Iranian infrastructure, including strategic facilities and transportation networks.
The latest flare-up followed earlier U.S. strikes on Iranian radar sites, air defenses and other military facilities near the Gulf after a U.S. helicopter was shot down. Iran subsequently launched missiles and drones at U.S. targets in Bahrain, Jordan and elsewhere. While most incoming threats were reportedly intercepted, the exchange has heightened investor sensitivity to further escalation.
On the fundamentals side, U.S. crude inventories have fallen for seven straight weeks. The latest weekly draw exceeded expectations by 4 million barrels, offering additional support to prices. Traders say continued inventory declines point to resilient demand despite high interest rates and economic uncertainty.
The market is now balancing two competing forces: tightening supply risks from rising tensions, constrained shipping and shrinking inventories, versus the possibility of renewed diplomacy. Further deterioration in transit through Hormuz could extend the rally, while signs of progress in negotiations may temper supply concerns.
