(Jan 29): Brent crude futures hit US$70 a barrel for the first time since September after US President Donald Trump warned Iran to make a nuclear deal or face military strikes.
The global oil benchmark rose as much as 2.7%, while US counterpart West Texas Intermediate topped US$65.
In a social media post on Wednesday, Trump said that US ships he ordered to the region were ready to fulfill their mission “with speed and violence, if necessary”.
Crude has rallied so far in 2026, countering expectations for a market pressured by significant oversupply. Instead, geopolitical tensions from Iran to Venezuela and major supply disruption in Kazakhstan have helped to bolster prices.
Trump’s latest threats have injected a risk premium into prices. Bullish call options have been more expensive than bearish puts for the longest stretch in about 14 months as traders seek to protect against the risk of a new confrontation between the US and Iran. Bullish option additions have also grown at the fastest pace in at least six years.
“The potential for Iran getting hit has escalated the geopolitical premium of oil prices by potentially US$3 to US$4 a barrel,” Citigroup analysts including Anthony Yuen said in a note. “Oil prices can stay more elevated than many had expected, despite markets starting the year anticipating large oversupply.”
See also: Oil options on longest bullish run since 2024 as Iran risk looms
A US strike could imperil crude flows from the Middle East, a region that accounts for about a third of global supply. Iranian retaliation could also extend to disruptions to shipping through the Strait of Hormuz, a narrow passage that separates Iran and the Arabian peninsula. Tankers carrying oil and liquefied natural gas transit through the strait to deliver cargoes worldwide.
Trump has repeatedly issued warnings on Iran, but those have most recently been linked to Tehran’s deadly crackdown on protests rather than its nuclear activities. The US president previously said the regime’s atomic programme was “obliterated” in strikes in June that targeted three facilities.
In response, Iran has said it stands ready for dialogue but warned it would respond with unprecedented force if pushed. Tehran has stepped up diplomacy with key powers in the Middle East as it looks to head off more conflict with US.
See also: Oil steady near four-month high on Iran risks and weak dollar
Prices:
- Brent crude added 2.7% to trade at US$70.26 a barrel as of 9.52am London time
- West Texas Intermediate climbed 2.9% to US$65.05 a barrel
Uploaded by Felyx Teoh
