Oil Prices Surge as US-Iran Tensions Escalate

Crude oil prices hit 4-month highs amid concerns over potential disruptions to supply in the Strait of Hormuz

Jan. 29, 2026 at 12:23pm

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Crude oil prices jumped on Thursday as the White House ratcheted up pressure on Iran over negotiations for a new nuclear deal. Brent crude oil briefly crossed $70 per barrel for the first time since September, while West Texas Intermediate crude traded above $65, as geopolitical risk premiums and record cold weather in the US have buoyed prices. The US has positioned naval vessels and other equipment capable of striking inside Iran, raising concerns about potential military action and disruptions to oil supply through the Strait of Hormuz.

Why it matters

The Strait of Hormuz is a critical global chokepoint, with around 20 million barrels of crude oil and other petroleum products crossing its waters every day. Any disruption to this flow would have wide-ranging impacts on global energy markets and prices. Additionally, the ongoing protests in Iran against the country's religious governing regime raise the risk of attacks on key oil infrastructure, which could further disrupt supply.

The details

The price gains come as the Trump Administration has warned Iran that it may face military strikes if the country does not negotiate a new nuclear agreement. The US has positioned naval vessels and other military equipment near Iran, with President Trump warning that a "massive Armada" is heading to Iran and that the next attack will be "far worse" than previous strikes. Analysts say Iran has limited ability to fully close off the Strait of Hormuz, but the regime has demonstrated its capacity to cause disruption through tactics like tanker attacks in the past.

  • On January 23, US commercial crude inventories unexpectedly decreased by 2.3 million barrels.
  • On January 29, Brent crude oil briefly crossed $70 per barrel for the first time since September.

The players

Trump Administration

The current US presidential administration, led by former President Donald Trump, has taken a hardline stance against Iran and threatened military action if the country does not negotiate a new nuclear deal.

Iran

The Islamic Republic of Iran, which has been under immense pressure from mass protests against its religious governing regime seeking to topple the Ayatollah.

Strait of Hormuz

A critical global chokepoint for oil and petroleum product shipments, with around 20 million barrels crossing its waters every day.

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What they’re saying

“Oil markets are rapidly repricing geopolitical risk as the probability of direct US action against Iran rises.”

— Jorge Léon, Head of geopolitical analysis, Rystad Energy (Yahoo Finance)

“A massive Armada is heading to Iran. It is moving quickly, with great power, enthusiasm, and purpose ... Like with Venezuela, it is, ready, willing, and able to rapidly fulfill its mission, with speed and violence, if necessary.”

— Donald Trump (Truth Social)

What’s next

The judge in any potential military action against Iran will be closely watched, as will the response from the Iranian regime and potential disruptions to global oil supply.

The takeaway

The escalating tensions between the US and Iran have the potential to significantly disrupt global oil markets, with the Strait of Hormuz being a critical chokepoint. This highlights the fragility of the global energy system and the need for continued diplomatic efforts to resolve geopolitical conflicts.