Brent crude oil prices jumped to a four-year high on Wednesday after Axios reported that US President Donald Trump is set to receive a briefing on new military options targeting Iran, raising fears of further escalation in the Middle East. The global benchmark surged as much as 7.1% before paring gains to trade near $122 per barrel.
"There's no signal for resolution," said Warren Patterson, Head of Commodities Strategy at ING, in an interview with Bloomberg. The potential for fresh conflict has rattled energy markets already strained by ongoing tensions in the region.
The report comes amid heightened rhetoric between Washington and Tehran, with Iran's supreme leader vowing to eliminate what he called "the enemy's abuses of the waterway," referring to the strategic Strait of Hormuz, through which about a fifth of the world's oil passes.
Analysts warn that any military confrontation could disrupt global oil supplies and push prices even higher. The rally also reflects growing concerns that diplomatic channels remain closed, leaving the door open for a possible escalation.
Meanwhile, US equity markets have largely moved past the Iran risk, according to Morgan Stanley's Mike Wilson, but the energy sector remains on edge as investors await the outcome of the briefing.