Brent, WTI Jump 4% on Fresh Supply Disruption Worries

By Adedapo Adesanya

The major crude oil grades appreciated by more than 4 per cent on Wednesday as traders priced in potential supply disruptions amid renewed geopolitical concerns.

Specifically, Brent crude futures garnered $2.93 or 4.35 per cent to trade at $70.35 a barrel, while the US West Texas Intermediate (WTI) crude futures chalked up $2.86 or 4.59 per cent to sell at $65.19 per barrel.

Wednesday’s price boost came amid fresh concerns of conflict between the US and Iran, just as talks between Ukraine and Russia in Geneva ended without a breakthrough.

It was reported that Israel had raised its alert level on increased indications of a possible attack on Iran by the US and Israel. Iran has vowed a retaliatory attack if there is any offensive from both countries.

Previously, prices fell after Iran’s foreign minister said Iran and the US had reached an understanding on the guiding principles of nuclear talks.

However, this took a new turn on Wednesday when Iran and Russia announced that they will conduct navy drills in the Sea of Oman and the northern Indian Ocean on Thursday.

This means Iran will temporarily shut parts of the Strait of Hormuz, a vital global oil supply route, due to security precautions while its elite Revolutionary Guards conduct military drills.

The strait has now been shut, with no indication when it will be fully reopened.

The closure will disrupt oil exports and could see a further rally in the coming days, which market analysts say US President Donald Trump doesn’t want, as it would increase fuel prices in the US.

Meanwhile, political consultancy Eurasia Group said in a Tuesday note to clients that it thinks there is a 65 per cent probability of U.S. military strikes against Iran by the end of April.

Also, peace talks in Geneva between Ukraine and Russia ended on Wednesday without a breakthrough, with Ukrainian President Volodymyr Zelenskiy accusing Russia of stalling efforts to end the four-year-old war.

President Trump has repeatedly pressured Ukraine to agree to a deal, even if it means losing some of its territories to Russia.

Hungary halted diesel shipments to Ukraine, calling the Ukrainian blockage of Russian oil transit “political blackmail,” and is now seeking alternative supply routes through Croatia.