Oil Markets Hold Steady as Middle East Tensions Continue

Oil prices were steady on Wednesday, following a sharp 4 percent surge in the previous session as the Israel–Iran conflict entered its sixth day. Traders remain cautious, weighing the risk of oil supply disruptions through critical shipping lanes—especially the Strait of Hormuz—against the potential for increased output from OPEC+ nations.

Brent crude was trading around $76.70 per barrel and U.S. West Texas Intermediate at $75.16, after rising modestly in Asian trade. The recent complaint from President Trump demanding Iran’s “unconditional surrender” and news of additional U.S. fighter jets being deployed to the region fueled investor concerns over further escalation.

Regional geopolitical jostling has had a knock‑on effect on broader financial markets. Significant gains in oil prompted a decline in stock futures across Asia and Europe. Meanwhile, investor sentiment shifted toward safe‑haven assets, with government bonds outperforming amid uncertainty over the Federal Reserve’s next move.

Analysts say that oil markets remain vulnerable: any direct attack on Iran’s energy infrastructure or threats to close the Strait of Hormuz could rapidly push prices even higher. However, with OPEC+ currently holding around 5.7 million barrels per day in spare capacity, the market may have some buffer—reducing the risk of a sustained supply shock.

Looking ahead, investors are watching for developments in both diplomatic talks and military actions, as well as upcoming economic data from the U.S. Fed. Higher oil prices have also become a key input in the inflation outlook, potentially influencing central bank policy decisions in the weeks ahead.