Brent Tops $85 as Supply Risk Raises Oil Prices
Brent crude climbed above $85 a barrel on Wednesday after US President Donald Trump threatened to target Iran’s energy infrastructure if negotiations fail, reviving concerns that an escalation in the Gulf could disrupt global oil supplies.
International benchmark Brent crude traded at $85.30 per barrel, up 0.7% from the previous close of $84.73. US benchmark West Texas Intermediate (WTI) traded at $79.66 per barrel, up 0.4% from $79.34 in the previous session.
Trump said Tuesday that US strikes against Iran would continue and intensify in the coming days, warning that Washington would begin targeting the country’s power plants and bridges next week unless Tehran returns to the negotiating table.
“We’re hitting them very, very hard. We’re hitting every single thing that they have along the shore, along the waterfront…They’ll continue until I say it’s enough,” Trump said during an interview with Fox News.
Asked if he is considering hitting energy targets, he responded: “I’ll save the energy targets for last, but ultimately we’ll hit energy targets.”
The US Central Command (CENTCOM) said late Tuesday that it had completed another round of strikes against Iran, hitting “dozens of military targets” near the Strait of Hormuz and along Iran’s southern coast.
“US fighter aircraft, drones and naval vessels launched precision munitions against Iranian missile and drone sites, naval capabilities and coastal defense systems during the seven-hour operation to further degrade Iran’s ability to threaten commercial shipping and civilian crews,” CENTCOM said in a statement.
CENTCOM also said US forces had resumed a naval blockade targeting vessels transiting to or from Iranian ports and coastal areas.
Analysts said the physical oil market remained adequately supplied for now but warned that any further escalation around the Strait of Hormuz or additional sanctions on Iranian energy exports could add a larger geopolitical risk premium to crude prices.
They said Brent could approach $100 per barrel if energy infrastructure in the Gulf comes under attack, while a diplomatic breakthrough leading to the full reopening of the Strait of Hormuz could pull prices back into the $75 to $80 range.
Meanwhile, the American Petroleum Institute (API) estimated that US commercial crude oil inventories fell by 564,000 barrels last week, below market expectations for a draw of 2.7 million barrels.
Investors are now awaiting official inventory data from the US Energy Information Administration (EIA), due later on Wednesday, for further signals on demand in the world’s largest oil consumer.
