Oil prices soar on fears of US-Iran war escalation

30th Apr 2026 11:02

(Sharecast News) - Oil prices soared on Thursday, hitting the highest level seen in the US-Iran war to date, on fears the conflict was poised to escalate.

Benchmark Brent crude rocketed to more than $126 a barrel in early trading, the highest price since 2022, when Russia invaded Ukraine, before paring back gains slightly. However, as at 1030 BST, and Brent was still trading well above recent levels, up 3% at $121.56. West Texas Intermediate was up 2% at $108.49.

Last week, oil had broadly been trading around $90. Markets had hoped that the conflict would be contained after Donald Trump agreed to extend a fragile ceasefire between the US and Iran earlier in April.

However, on Wednesday the US president once again ramped up the rhetoric. Trump posted a smiling picture of himself on social media wearing sunglasses and holding an assault rifle, with the caption "No more Mr Nice Guy!". He later warned that the US Navy would maintain its blockade of the Strait of Hormuz until Tehran agreed to give up its nuclear programme.

It was then separately reported that Trump and his advisors had met with oil company executives to discuss the impact of the blockade lasting for months. Axios also reported that the US military planned to brief the president on a fresh wave of "short and powerful" attacks on Iran.

Tehran, meanwhile, remained bullish, with a senior IRGC officer warning that American warships could be targeted if the ceasefire collapsed.

Markets fear that any worsening of the conflict will lead to protracted oil supply disruption, weighing on global economic growth and spiking inflation. Around a fifth of the world's oil and liquified natural gas is transported through the Strait of Hormuz, but the US Navy is blockading Iranian exports while Tehran has vowed to attack ships belonging to America, Israel or its allies.

Russ Mould, investment director at AJ Bell, said: "The relative calm the market has displayed so far over the Iran war has started to dissipate, with oil prices creeping higher on fears a timely resolution to the conflict is slipping away."

Joshua Mahony, chief market analyst at Scope Markets, said: "Iran's insistence that they will hold out as long as is required means that at some point, Trump has to either escalate or capitulate. For the president, his desire to draw a line under the conflict has been seen as a weakness rather than a driver for intensified negotiations.

"With both sides holding onto a set of incompatible red lines, the prospect of a swift conclusion has become a pipe dream."