By Giulia Petroni


Oil prices surged to a wartime high on fears that the U.S. might resume military action against Iran in order to break deadlocked peace negotiations, threatening to prolong supply disruptions and intensify the global energy shock.

In early European trading, Brent crude for June delivery, which expires on Thursday, rose 4.1% to $122.82 a barrel after surpassing $123, its highest level since 2022. The more active July contract was up 2.1% to $112.70 a barrel. West Texas Intermediate futures for June gained 1.6% to $108.56 a barrel.

"The oil market has moved from over-optimism to the reality of the supply disruption we are seeing in the Persian Gulf," ING analysts said.

Talks to resolve the conflict have stalled. The Wall Street Journal reported that President Trump instructed aides to prepare for an extended naval blockade of Iran after saying that Tehran's proposal to reopen the Strait of Hormuz and postpone nuclear talks proved the government wasn't negotiating in good faith.

Axios also reported that Trump is set to receive a briefing Thursday on new options for potential military action, and that the U.S. Central Command has prepared a plan for a "short and powerful" wave of strikes.

The Strait of Hormuz has become a central sticking point in the impasse, leaving one of the world's most critical oil chokepoints in limbo. Iran has tightened its control of the strait and is imposing transit fees, while the U.S. Navy has imposed sweeping restrictions on ships linked to Iranian ports.

Expectations that flows could remain constrained for a prolonged period have heightened concerns about a rapidly shrinking global supply cushion, with market participants warning that demand destruction might ultimately be required to rebalance the market.

"The longer this disruption persists, the less the market can rely on inventory, and the greater the need for further demand destruction," ING analysts said. "The only way to drive this would be through higher oil prices." The firm estimates demand losses of about 1.6 million barrels a day--significant, but insufficient to offset the current supply shortfall.


Write to Giulia Petroni at giulia.petroni@wsj.com


(END) Dow Jones Newswires

04-30-26 0332ET