Oil price hits $76.71/barrel as Iran-Israel Conflict Deepens

The prices of oil rose on Wednesday, June 18, 2025, extending a 4% gain from the previous session on worries that the Iran-Israel conflict could disturb supplies.

Brent crude futures rose 26 cents, or 0.3%, to $76.71 a barrel by 0440 GMT, while U.S. West Texas Intermediate crude futures rose 35 cents, or 0.5%, to $75.19 per barrel.

According to (Reuters) on June 17 – President Donald Trump called on Tuesday for Iran’s unconditional surrender and warned U.S. patience was wearing thin, but said there was no intention to kill Iran’s leader “for now”, as the Israel-Iran air war entered a sixth day.

An Israeli military official said approximately 10 ballistic missiles were launched from Iran toward Israel in the early hours of Wednesday morning and most of them were intercepted. Explosions were heard over Tel Aviv.

According to analysts, the market was largely worried about supply disruptions in the Strait of Hormuz, which carries a fifth of the world’s seaborne oil.

Iran is OPEC’s third-largest producer of oil, drawing out almost 3.3 million barrels per day (bpd) of crude oil.

“Material disruption to Iran’s production or export infrastructure would add more upward pressure to prices. However, even in the unlikely event that all Iranian exports are lost, they could be replaced by spare capacity from OPEC+ producers … around 5.7 million barrels a day,” said Fitch analysts in a statement.

Brent crude oil prices have gained about $10 a barrel over the past two weeks, and Fitch analysts said they expect the geopolitical risk premium in oil prices to be contained at around $5 to $10.

In another indication of market’s anxiety, Brent crude’s premium to Middle East benchmark Dubai take off above $3 a barrel on Wednesday, market sources said, hitting its highest since late September 2023 according to LSEG data.
Markets are also looking ahead to a second day of U.S. Federal Reserve discussions on Wednesday, in which the central bank is expected to leave its benchmark overnight interest rate in the 4.25%-4.50% range-Reuters.

IG market analyst Tony Sycamore has stated that oil prices are likely to remain volatile due to ongoing geopolitical tensions in the Middle East, specifically the potential for a wider conflict between Israel and Iran. IG research says the market is reacting to these risks, as well as macroeconomic uncertainties, and that the current price volatility is likely to persist. According to IG, oil prices are already up significantly due to the escalating conflict, and there are concerns that further escalation could lead to a significant increase in energy prices, potentially impacting inflation and global economic growth. 

=Reuters=