Washington: Oil prices surged Wednesday, with Brent crude futures climbing more than 7% to above $119 per barrel, marking their highest level since June 2022. This increase comes as concerns grow over prolonged supply disruptions linked to the ongoing conflict with Iran and the continued closure of the Strait of Hormuz.

According to Anadolu Agency, the international benchmark rose sharply following US President Donald Trump's decision to reject an Iranian proposal to reopen the crucial Strait of Hormuz, while delaying nuclear negotiations. Trump's administration has maintained the naval blockade on Iran, insisting that Tehran must agree to address US concerns regarding its nuclear program before any progress can be made.

Trump's comments, reported by Axios, indicated that the blockade is more effective than military action, asserting that Iran is under increasing pressure and emphasizing the importance of preventing Iran from obtaining nuclear weapons. These remarks have heightened expectations that the standoff could extend for weeks, keeping risk premiums elevated across the energy markets.

Market fears have been further intensified by reports that the US Central Command has prepared plans for a potential wave of strikes on Iran if negotiations remain stalled, although no military action has been ordered by Trump thus far. The strategic Strait of Hormuz remains a vital energy passage, and any extended disruption threatens the flow of crude, liquefied natural gas, and refined fuels from the Gulf region.

Additional pressure on the market came from tightening supply signals in the US, where crude and fuel stockpiles experienced a sharp decline last week, while crude exports surged to a record high of over 6 million barrels per day. The market is also grappling with uncertainty following the United Arab Emirates' announcement of its exit from OPEC and OPEC+, which adds to the challenges faced by the producer group during this severe energy shock.