- Oil prices rose amid escalating conflict involving the US, Israel, and Iran
- Brent crude closed near $83, with WTI climbing toward $76 per barrel
- US and Iranian military actions intensified, including sinking an Iranian warship
Oil prices remained elevated as traders weighed the escalating conflict involving the US, Israel and Iran, with the surge in crude raising concerns about renewed inflationary pressures across global economies.
Brent crude closed near $83 a barrel, reflecting heightened fears that the conflict could disrupt energy supply from one of the world's most critical oil-producing regions. West Texas Intermediate climbed toward $76 a barrel, extending gains after jumping roughly 11% in the first three days of the week.
The rally in crude has been driven by the widening fallout from the military confrontation involving the US, Israel and Iran. Both sides have signaled that hostilities are likely to continue, keeping energy markets on edge.
President Donald Trump expressed confidence in the ongoing military campaign against Iran, though he did not outline a clear timeline for the operations. The conflict has intensified in recent days, with Tehran launching attacks targeting Israel and Gulf states, while Israeli and US forces have carried out strikes on Iranian targets.
In a further escalation, the United States sank an Iranian warship in international waters.
Diplomatic Efforts Struggle to Gain Traction
Iran dismissed reports suggesting it had reached out to Washington to negotiate an end to the conflict, calling the claims “pure falsehood.” At the same time, diplomatic efforts are underway to prevent further escalation. China said it would send its special envoy for Middle East affairs to the region in an attempt to mediate between the parties involved.
Despite these developments, traders remain focused on the potential for supply disruptions in the Middle East, a region that accounts for a significant share of global oil production and exports.
While energy markets remain volatile, broader financial markets showed signs of stabilising after an initial bout of risk aversion triggered by the conflict. Asian equities rebounded following sharp losses in the previous session, tracking gains on Wall Street supported by stronger-than-expected economic data.
South Korea's Kospi index led the regional recovery, surging 12% after suffering its steepest drop on record a day earlier. The MSCI Asia Pacific Index rose 2.8%, while futures tied to US benchmarks also moved higher.
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