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Arab-Israeli conflicts

Oil Prices Rise Amid Middle East Conflict and Supply Disruptions

Strategic Insights

— 2 min read

Oil prices surged in early trading on Wednesday as concerns grew over the potential for supply disruptions in the Middle East due to the escalating conflict between Iran and Israel. Despite a more than 4% increase in the previous session, Brent crude futures rose 19 cents to $76.64 a barrel, while US West Texas Intermediate (WTI) crude futures rose 23 cents to $75.07 a barrel. Analysts believe the market is largely concerned about disruptions in the Strait of Hormuz, through which a fifth of the world's seaborne oil passes.

Key Takeaways:

  • Oil prices rose in early trading on Wednesday, with Brent crude futures increasing by 19 cents to $76.64 a barrel and US WTI crude futures rising by 23 cents to $75.07 a barrel.
  • The conflict between Iran and Israel has led to concerns over supply disruptions in the Middle East, particularly in the Strait of Hormuz, through which a fifth of the world's seaborne oil passes.
  • US President Donald Trump called on Iran for "unconditional surrender" as the air war between Iran and Israel entered its sixth day, further exacerbating tensions.
  • The US military is deploying more fighter jets to the region to reinforce its forces, with three officials confirming the move.
  • The UK Maritime Trade Operations (UKMTO) warned of electronic interference affecting shipping navigation systems near the Strait of Hormuz.
  • Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), producing about 3.3 million barrels per day of crude.
  • Markets are awaiting the second day of the US Federal Reserve's policy meeting on Wednesday, when the central bank is expected to keep its benchmark overnight interest rate at a range of 4.25% to 4.50%.
  • Analyst Tony Sycamore predicts that the conflict could push the Fed to cut interest rates by 25 basis points in July, earlier than the market expects in September.
  • The conflict is creating a new source of inflation through higher oil prices, which could confound the Fed's decision on interest rates.

Statistics:

  • Brent crude futures rose 19 cents to $76.64 a barrel.
  • US WTI crude futures rose 23 cents to $75.07 a barrel.
  • Iran produces about 3.3 million barrels per day of crude oil, making it the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC).
  • The Strait of Hormuz carries a fifth of the world's seaborne oil.
  • The US Federal Reserve's benchmark overnight interest rate is currently at a range of 4.25% to 4.50%.

Sources:

  • National Iraqi News Agency (18 Jun 2025)
  • IG market analyst Tony Sycamore
  • American Petroleum Institute (cited by market sources)
  • US Federal Reserve (expected policy meeting on 18 Jun 2025)

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