Oil Prices Climb as Middle East Conflict Keeps Supply Risks Elevated

Oil prices edged higher in early Wednesday trading as ongoing Middle East instability continued to rattle energy markets, even as diplomatic efforts between the U.S. and Iran showed tentative signs of progress. Brent crude futures for June delivery climbed 66 cents, or 0.63%, to $104.63 per barrel, while U.S. West Texas Intermediate rose 96 cents to $102.34 per barrel.

The gains came after Brent posted a historic 64% monthly surge in March — its largest single-month rally on record dating back to 1988 — driven largely by supply disruptions stemming from the closure of the Strait of Hormuz, a critical chokepoint through which roughly 20% of the world's oil and liquefied natural gas passes.

Analysts at LSEG cautioned that despite active diplomatic channels and optimistic statements from U.S. officials, meaningful progress remains limited. Continued maritime attacks and direct threats against energy infrastructure are keeping supply risk elevated, they noted.

President Donald Trump told reporters Tuesday that the U.S. military campaign could wrap up within two to three weeks, adding that Iran need not reach a formal agreement for the conflict to end. Still, energy analysts warn that even a ceasefire may not quickly ease supply constraints, as extensive infrastructure damage is expected to keep output tight for some time.

OPEC production fell by 7.3 million barrels per day in March compared to the prior month, according to a Reuters survey, underscoring the severe impact of forced export reductions tied to the strait's blockage. In response, analysts raised their 2026 Brent crude price forecast by approximately $19 per barrel — from $63.85 to $82.85 — marking the steepest upward revision in Reuters' monthly oil poll history, which dates to 2005.

With no clear resolution in sight, global energy markets remain on edge.