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Oil prices soar on fears of US-Iran war escalation
By Abigail Townsend
Date: Thursday 30 Apr 2026
(Sharecast News) - Oil prices whipsawed on Thursday, at one point hitting the highest level since the war began, as market volatility spiked.
Benchmark Brent crude rocketed to more than $126 a barrel in early trading, the highest price since 2022, when Russia invaded Ukraine. However, by 1430 BST it had fallen back, with Brent down nearly 4% at $113.89 and West Texas Intermediate off 2% at $104.43.
Prices had initially soared on fears war in the Middle East was set to escalate, despite the fragile ceasefire between the US and Iran.
On Wednesday Donald 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!", before later warning 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 mean protracted Middle East oil supply disruption, weighing heavily 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. It means the narrow waterway is now too dangerous to pass.
Further adding to the volatility, June contracts settled on Thursday. Prices for July delivery remain more elevated than August contracts, noted Neil Wilson, UK investor strategist at Saxo, "indicating near-term supply concerns are the main driver of the front-month action, with the curve in extreme backwardation".
He continued: "The oil market has moved from ignoring headlines and hoping for resolution to fixating squarely on the physical scarcity and long-term threat to supply with the possible escalation of conflict now looming."
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 on to a set of incompatible red lines, the prospect of a swift conclusion has become a pipe dream."
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