Brent Crude Tops USD119 Amid Mideast Tensions

(MENAFN) Oil markets jolted sharply higher on Wednesday, with Brent crude futures vaulting more than 7% to breach $119 per barrel — their loftiest level since June 2022 — as the protracted closure of the Strait of Hormuz and deepening US-Iran tensions threatened to keep global energy supplies under severe strain.

The international benchmark surged after US President Donald Trump flatly rejected an Iranian proposal to reopen the critical waterway in exchange for deferring nuclear talks, dashing hopes of a near-term diplomatic breakthrough and cementing trader fears of an extended supply crunch.

Trump Signals No Letup on Naval Blockade
Speaking to media, Trump made clear the naval blockade encircling Iran would remain firmly in place until Tehran agrees to terms addressing Washington's concerns over its nuclear ambitions.

"The blockade is somewhat more effective than the bombing," Trump told media, adding that Iran was facing growing pressure and "can't have a nuclear weapon."

The remarks cemented market expectations that the standoff could stretch for weeks, keeping risk premiums deeply embedded across global energy markets.

Adding to the tension, reports emerged that the US Central Command has drawn up contingency plans for a "short and powerful" wave of strikes against Iran should negotiations remain deadlocked — though Trump has yet to authorize any military action.

A Chokepoint the World Cannot Afford to Lose
The Strait of Hormuz — through which a substantial share of the world's crude oil, liquefied natural gas, and refined fuel flows from the Gulf — remains among the most strategically irreplaceable energy corridors on the planet. Any sustained disruption sends tremors across commodity markets globally, and Wednesday's price action reflected precisely that anxiety.

Domestic supply signals added further upward pressure. US crude and fuel inventories posted a steep decline last week, even as American crude exports surged to a record high exceeding 6 million barrels per day — a combination that tightened the market's already strained supply-demand calculus.

OPEC Fractures Add to Market Unease
Compounding the turbulence, the United Arab Emirates' unexpected decision to withdraw from both OPEC and OPEC+ cast a fresh shadow over the cohesion of the producer bloc — arriving at one of the most acute energy shocks in recent memory and raising new questions about coordinated output management at a moment of maximum market stress.

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