Oil prices rose on Wednesday after markets shrugged off President Donald Trump’s proposal to deploy the U.S. Navy to escort oil tankers through the Strait of Hormuz, a move aimed at calming traders’ concerns about the security of global energy supplies.
As of this writing, Brent crude oil (BZ=F) futures were up 2.6% at $83.53 a barrel, while West Texas Intermediate crude oil (CL=F) was up 2.3% at $76.29 a barrel.
Oil prices were pushed higher due to tensions surrounding the Strait of Hormuz. About 20% of the world’s oil and natural gas flows through this narrow waterway. Concerns about potential disruptions have unsettled markets in recent sessions, adding to volatility.
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Iran’s Revolutionary Guards claim “complete control” of the Strait of Hormuz and have warned that any ship trying to pass through the waterway will be targeted.
Trump sought to reassure investors that Washington was ready to ensure safe passage for tankers. He wrote on his “Truth Social” platform: “If necessary, the U.S. Navy will begin escorting oil tankers through the Strait of Hormuz as soon as possible.” He added: “No matter what, the United States will ensure the free flow of energy to all parts of the world.”
Despite the pledge, traders remained cautious, arguing that continued reductions in flows through the Strait could quickly lead to tight global supplies.
“Naval convoys will be targeted by Iranian attacks,” said ING’s Warren Patterson.
“As a result, the United States may choose to wait until it determines that Iran’s offensive capabilities have declined before escorting the ships.”
Goldman Sachs (GS) raised its average Brent crude oil (BZ=F) price forecast for the second quarter of 2026 by $10 to $76 per barrel, and raised its average WTI (CL=F) price forecast by $9 to $71 per barrel.
The bank said its revised outlook assumes reduced oil flows through the Strait of Hormuz will lead to sharp declines in OECD inventories and Middle East oil production in March.
“If Hormuz crude production remains flat over the next five weeks, Brent crude (BZ=F) prices could reach $100, a level associated with greater demand destruction to prevent inventories from falling to extremely low levels,” the bank said in a note.
JP Morgan estimates that if the Strait of Hormuz remains closed, crude oil supplies from Iraq and Kuwait will be shut down within days, with supply losses expected to be as high as 4.7 million barrels per day.
ANZ raised its forecast for the average Brent crude oil price (BZ=F) in the first quarter of 2026 to US$90 per barrel and its LNG forecast to US$17 per barrel per mmBtu.
Gold prices rose on Wednesday as escalating conflict in the Middle East roiled global markets and revived demand for safe-haven assets.
