Oil prices rose sharply during Thursday’s Asian session, driven by reports that the United States is considering military action against Iran to break a deadlock in negotiations, fuelling concerns over further disruptions to global energy supplies.
By 2:55 pm AEST (4:55 am GMT), Brent crude futures for July had climbed $3.60, or 3.3%, to $114.04 per barrel. U.S. West Texas Intermediate crude futures for June rose $3.42, or 3.2%, to $110.30 per barrel.
Both benchmarks are on track for a fourth consecutive monthly gain, after surging 5.8% and 7% respectively in the previous session, trading at their highest levels since the onset of the Iran conflict.
According to an Axios report late Wednesday, U.S. President Donald Trump is set to receive a briefing on potential military strikes aimed at pressuring Iran back into negotiations over its nuclear programme.
Efforts to resolve the conflict have stalled, with the United States pushing to address Iran’s alleged nuclear weapons ambitions, while Tehran has demanded partial control over the Strait of Hormuz and compensation for war-related damages.
The conflict has already resulted in significant loss of life and what has been described as one of the largest energy disruptions on record.
"The oil market has moved from over-optimism to the reality of the supply disruption we are seeing in the Persian Gulf," ING analysts noted in The Commodities Feed.
"The breakdown of talks between the U.S. and Iran, along with President Trump reportedly rejecting Iran’s proposal for a reopening of the Strait of Hormuz, has the market losing hope for any quick resumption in oil flows.
"While we estimate demand destruction in the region of 1.6m b/d, which is significant, it’s clearly not enough to fill the supply gap we are currently facing. The longer this disruption persists, the less the market can rely on inventory, and the greater the need for further demand destruction. The only way to drive this would be through higher oil prices."
Further signs point to a prolonged standoff. A White House official confirmed that Trump has held discussions with oil companies on mitigating the effects of a potential months-long US blockade.
ANZ analysts highlighted mounting storage constraints in Iran, stating: "Data analytics firm Kpler reported that Iran has enough unused storage capacity to last another 12–22 days. Once full, it would need to cut daily output by 1.6mb/d. This adds to the more than 10mb/d of oil production we believe has been shut in by the closure of the strait."
Meanwhile, the OPEC+ alliance is expected to consider a modest production increase of around 188,000 barrels per day at its upcoming meeting, according to sources cited by Reuters.
The decision comes shortly after the United Arab Emirates confirmed its withdrawal from the group, effective 1 May, a move that could weaken the organisation’s ability to manage supply and influence prices.
On the supply side, U.S. inventory data provided additional support to prices. The Energy Information Administration (EIA) reported a drawdown of 6.2 million barrels in commercial crude inventories for the past week, significantly exceeding market expectations for a decline of just 0.2 million barrels.
Total U.S. crude stockpiles now stand at 459.5 million barrels, approximately 1% above the five-year average for this time of year.



