S&P 500 — US Large Cap Index
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IPC Index — Mexico Market- WTI Oil prices surge as fears of a prolonged Middle East conflict intensify.
- Conflicting signals from Washington and Tehran keep uncertainty elevated.
- Supply risks and the Strait of Hormuz disruption sustain a strong geopolitical premium.
West Texas Intermediate (WTI) US Oil rises sharply and trades around $96.00 at the time of writing on Friday, up 3.55% on the day. The Oil market remains driven by heightened geopolitical uncertainty, as investors increasingly price in a prolonged conflict involving Iran, with potential long-term disruptions to global energy supply.
After a brief easing of sentiment following Tehran’s decision to allow several Oil tankers to pass, optimism quickly faded. Military strikes continue across the region, while conflicting statements make the diplomatic outlook harder to assess. US President Donald Trump says negotiations are going “very well”, while Iranian officials state they are still awaiting Washington’s response to ceasefire conditions.
At the same time, the Wall Street Journal reports that the Pentagon is considering deploying an additional 10,000 troops to the Middle East, fueling fears of a broader military escalation. A deeper US involvement would increase the likelihood of a prolonged closure or disruption of the Strait of Hormuz, a critical chokepoint for global Oil shipments, thereby supporting prices.
ING analysts note that risks remain tilted to the upside despite the extension of deadlines related to energy infrastructure. According to the bank, around 8 million barrels per day are already affected, while a much larger volume of supply remains exposed to potential disruptions. ING believes this situation is keeping a significant geopolitical premium embedded in energy prices.
Meanwhile, Nordea’s Jan von Gerich highlights that despite recent volatility, Oil prices have not yet reached new highs, suggesting that a de-escalation scenario is still possible, although its probability has declined.
In this environment, Oil prices remain highly sensitive to geopolitical developments, and the absence of a clear de-escalation continues to support expectations of elevated prices over a prolonged period.
