Key facts
- Oil prices rose approximately 2% following comments from U.S. President Donald Trump regarding Iran.
- Brent futures reached $93.19 a barrel and WTI crude $90.11.
- The conflict has reintroduced a geopolitical risk premium into oil markets.
- Iran's blockade of the Strait of Hormuz is disrupting fertilizer shipments, threatening global food security.
- Approximately 30% of global urea trade is affected, with developing nations being particularly vulnerable.
Oil prices climbed on Wednesday after U.S. President Donald Trump posted on Truth Social, criticizing Iran's negotiation stance following overnight strikes between the two nations. Brent futures rose 1.9% to $93.19 a barrel, and U.S. West Texas Intermediate crude gained 2.17% to $90.11. The renewed military exchanges have reintroduced a geopolitical risk premium into oil markets, shifting traders' focus back toward potential supply disruptions. Tehran has indicated it would resume hostilities if Israel continued its campaign against Hezbollah. Iran's ongoing blockade of the Strait of Hormuz, a critical chokepoint for global oil and LNG trade, continues to impact markets. Simultaneously, farmers globally are facing pressure from rising fuel costs and a significant fertilizer shortage exacerbated by the Iran conflict. Iran's near shutdown of the Strait of Hormuz has halted shipments of essential nutrients like nitrogen and phosphate, impacting approximately 30% of global urea trade. This shortage threatens food security, particularly in developing nations heavily reliant on imports from the Gulf, potentially leading to higher food prices.