Crude prices rallied by nearly five per cent in a single session, with Brent crude climbing to $71.62 per barrel, its strongest level in months. Nigeria’s Bonny Light crude also spiked, touching $78 per barrel for the first time since August last year. In the United States, West Texas Intermediate (WTI) crude advanced 4.79 per cent to trade around $66.24 per barrel, briefly rising above $65 for the first time since September.
The sharp price movement followed renewed warnings from U.S. President Donald Trump, who adopted a more confrontational stance toward Iran. In a series of remarks, the President cautioned Tehran that a “massive armada” of U.S. Navy ships was moving toward the Persian Gulf, escalating geopolitical risks that traders say could threaten global oil flows.
Markets reacted swiftly as investors reassessed the possibility of Iranian supply being curtailed. Iran currently produces about 3.3 million barrels of oil per day, and even a partial disruption could significantly tighten the global market. Analysts noted that oil prices have historically been sensitive to developments in the Gulf, where a large share of the world’s crude exports transit through strategic shipping routes.
“The situation with Iran continues to escalate,” said Josh Young, Chief Investment Officer at Bison Interests. He noted that the removal of even a fraction of Iranian exports from the market would be enough to sustain recent price gains, with the potential for further upside depending on the scale of any disruption and whether other regional supplies are placed at risk.
On the New York Mercantile Exchange, WTI crude for March delivery rose to about $66.21 per barrel after touching an intraday high of $66.40, its strongest level since late September. Brent crude futures for March delivery added roughly 4.7 per cent on ICE Futures Europe, positioning the benchmark for its highest close since July.
The renewed rally comes after a brief period of relative calm in U.S. rhetoric toward Iran. That pause ended when President Trump urged Tehran to reach a nuclear agreement, warning that “time is running out.” He followed up with a stark message on his Truth Social platform, suggesting that a U.S. naval deployment—larger than one previously sent toward Venezuela—was moving with “speed and violence, if necessary.”
Iran responded by signalling openness to dialogue while simultaneously warning that it would defend itself forcefully if attacked. Its mission to the United Nations stated that Iran was prepared for talks, but cautioned that pressure would be met with an unprecedented response.
Energy market analysts say the risk premium now being priced into oil reflects fears of a broader confrontation. Robert Yawger, Director of Energy Futures at Mizuho Securities USA, wrote that the timeline for potential U.S. military action against Iran appears to be shortening, with speculation focusing on targeted strikes against military installations, missile sites, and nuclear facilities. The United States carried out air and sea strikes on Iranian nuclear sites in June last year.
Despite having weathered multiple geopolitical crises over the years, Iran’s oil production remains a key variable for markets. Any sustained disruption, analysts warn, could tighten supplies at a time when inventories are already sensitive to demand shifts.
Commenting on the latest developments, ING commodities strategists Warren Patterson and Ewa Manthey said the more aggressive rhetoric has left oil markets increasingly uneasy. According to them, the renewed uncertainty over Middle East stability is reviving fears of supply shocks, keeping prices firmly supported as traders brace for further headlines.