Oil Continues to Rise Amid Increasing US Threats to Iran

SadaNews - Oil prices rose for the third consecutive day after US President Donald Trump warned Iran that it must reach a nuclear deal or face military strikes, reviving fears of potential disruptions and supply outages in the Middle East.

The prices of March delivery Brent crude contracts increased by 1.3% to reach $69.29 per barrel at 2:04 PM Singapore time, while West Texas Intermediate crude contracts for March rose by 1.4% to trade at $64.11 per barrel.

Trump stated in a social media post on Wednesday that the US ships he ordered sent to the region are ready to carry out their mission "quickly and violently if necessary."

Risk Premium Despite Supply Pressures

Trump's latest threats have added a risk premium to the prices, even as the market faces downward pressures due to an expected increase in supply. Traders are paying a high premium for bullish call options for the longest period in nearly 14 months to hedge against the risk of renewed confrontation between the US and Iran.

In recent years, options markets have become a key channel for traders' bets on rising geopolitical risks in the Middle East. Options premiums spiked after the US conducted a military strike on Iran in 2025, before later declining when it became clear that oil facilities had not sustained damage.

Strait of Hormuz at Risk

Any US attack could jeopardize crude flows from the Middle East, a region that accounts for about one-third of global supplies. Furthermore, any Iranian responses could disrupt shipping traffic through the Strait of Hormuz, the narrow maritime passage that separates Iran from the Arabian Peninsula, through which oil and liquefied natural gas tankers deliver shipments worldwide.

Trump has repeatedly issued warnings to Iran, though most recently they have been linked to Tehran's violent crackdown on protests rather than its nuclear activities. The US president had previously stated that the Iranian regime's nuclear program was "completely destroyed" in strikes conducted in June that targeted three facilities.

For its part, Iran has expressed readiness for dialogue but warned that it would respond with "unprecedented force" if faced with further pressure. Tehran has also intensified its diplomatic efforts with key powers in the Middle East in an attempt to contain the escalation and prevent the region from sliding further into conflict with the United States.