U.S. oil prices surge by nearly 5% on bets that U.S. strike on Iran is imminent

MW U.S. oil prices surge by nearly 5% on bets that U.S. strike on Iran is imminent

By Myra P. Saefong

'Diplomacy is making no progress,' analyst says

U.S. oil futures topped $66 a barrel on Thursday.

Oil prices rallied Thursday by nearly 5%, with the global benchmark touching its highest level since July as tensions between the U.S. and Iran worsened, raising concerns over disruptions to the global flow of crude.

"The situation with Iran continues to escalate," said Josh Young, chief investment officer at Bison Interests, an oil and gas investment firm.

"If even a portion of Iranian supplies come off the market, that would be enough to sustain recent gains," he told MarketWatch. That could also lead to further gains, "depending how much more comes off and if other supplies are put at more direct risk."

West Texas Intermediate crude for March delivery (CL.1) (CLH26) was up 4.8% at $66.21 a barrel on the New York Mercantile Exchange after trading as high as $66.40. That was the highest intraday level since Sept. 26, according to Dow Jones Market Data. March Brent crude (BRNH26) tacked on 4.7% to $71.62 on ICE Futures Europe, poised for its highest finish since July.

Prices had settled Wednesday at a four-month high as President Donald Trump renewed its threats on Iran, pressuring it to reach a nuclear deal.

In a post on social media Wednesday, Trump warned that a "massive armada" was headed toward Iran and urged the country to "negotiate a fair and equitable deal - NO NUCLEAR WEAPONS - one that is good for all parties."

"Time is running out, it is truly of the essence!" he said in the post.

In response, Iran's mission to the United Nations in New York posted on X that Iran was ready for dialogue, adding: "BUT IF PUSHED, IT WILL DEFEND ITSELF AND RESPOND LIKE NEVER BEFORE!"

'The timeline on a U.S. attack on Iran appears to be drawing near.'Robert Yawger, Mizuho Securities USA

"The timeline on a U.S. attack on Iran appears to be drawing near," Robert Yawger, director of energy futures at Mizuho Securities USA, wrote in a note Thursday.

Read: Why oil experts say U.S.-Iran tensions feel different this time compared with previous crises

"A quick read through of the mainstream press generally seems to tilt towards surgical strikes on the Iranian leadership, with the goal of forcing regime change," he said. "Targets would include military bases used by the Revolutionary Guard and the Basij militia, ballistic missile sites, and Iran's nuclear program." The U.S. launched air and sea strikes on three nuclear sites in Iran in June of last year.

Yawger said that one common theme Thursday morning is that "diplomacy is making no progress."

Iran produces around 3.3 million barrels per day of oil, with production "generally surviving multiple crisis over the years," Yawger said.

-Myra P. Saefong

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

January 29, 2026 10:21 ET (15:21 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.