Oil holds near six-month peak on US-Iran tensions

Brent crude traded near $72 a barrel after climbing more than 6% across the previous two sessions, while West Texas Intermediate hovered around $67, News.Az reports, citing Bloomberg.

Trump indicated that 10 to 15 days was “pretty much” the maximum timeframe he would allow for negotiations to continue, heightening market concerns over a potential conflict and the risk of supply disruptions.

The United States has undertaken its largest military buildup in the Middle East since 2003, ahead of the invasion of Iraq. The scale of deployments suggests the possibility of a broader campaign than last June’s overnight strike on Iran’s nuclear facilities. At the same time, Trump is reportedly considering a more limited initial strike aimed at pressuring Tehran back to the negotiating table, according to the The Wall Street Journal.

Iran, a member of OPEC, produces more than 3 million barrels of crude per day — roughly 3% of global output — and exports most of it to China. A key concern for energy markets is the possibility that Iran could attempt to block the Strait of Hormuz, a crucial route for oil shipments from Persian Gulf producers.

Crude prices have risen by about one-sixth this year as traders weigh geopolitical risks in the region, offsetting earlier expectations of a growing supply surplus that had pressured prices toward the end of 2025. A prolonged military campaign could push prices higher still, potentially lifting gasoline costs and adding political pressure ahead of U.S. midterm elections later this year.

Diplomatic efforts remain uncertain. The head of the International Atomic Energy Agency warned that Iran’s opportunity to secure a diplomatic solution over its nuclear activities may be narrowing. The agency has discussed concrete proposals with Tehran to inspect sites that were targeted in last year’s strikes.

Market structures are reflecting the heightened risk. Brent’s one-year timespread widened into its strongest backwardation since June, a configuration that signals tighter short-term supply. The six-month spread also moved deeper into backwardation. Meanwhile, options markets for both Brent and WTI show a stronger bias toward bullish call options, indicating growing expectations of further price gains.

Additional support came from U.S. inventory data. According to the Energy Information Administration, crude stockpiles fell by 9 million barrels — the largest weekly decline since early September. Inventories of refined products also dropped across the board, reinforcing the upward momentum in oil markets.