Oil Rally Biggest Since October, Hormuz Leads
Oil prices surged sharply on Wednesday (February 18th), posting their biggest daily gain since October, as market participants weighed whether US-Iran talks were truly sufficient to avert conflict. Sentiment worsened after reports emerged that the option of US military intervention could come sooner than expected.
At the close, WTI surged 4.6% to finish around $65.11 per barrel, while Brent rose to $70.22 per barrel, breaking through $70 for the first time in more than two weeks. This surge signaled a return of the “risk premium” to prices.
Axios reported that if an escalation occurs, the US military operation would likely be a weeks-long campaign, rather than a short operation like the one in Venezuela last month. The report also suggested that the Israeli government is pushing for more aggressive targets, including scenarios leading to regime change.
The center of market concern remains the same: the Strait of Hormuz. This route is the main “spike” for Gulf energy exports, so any disruption—even temporary—would immediately trigger a price spike. In recent days, Iran has also reportedly temporarily closed the Hormuz region due to military exercises, adding to market sensitivity.
On the diplomatic front, talks have yet to reach a final conclusion. Tehran claims there is a "general agreement" on the terms of a potential nuclear deal, while the US says Iranian negotiators will return with a new proposal in two weeks—but the market perceives the process as still fragile.
Geopolitical pressures are also spreading from another perspective: US-mediated Russia-Ukraine peace talks in Geneva have stalled again and ended prematurely, fueling concerns that the risk of a prolonged conflict remains high. Simultaneously, the US announced visa restrictions on several Iranian officials and telecommunications sector leaders, further signaling that political tensions have not fully subsided.
In conclusion, this oil rally is not simply a technical reaction—the market is pricing in a "two-track" scenario: ongoing diplomacy, but the potential for military escalation that feels increasingly imminent. As long as uncertainty in Hormuz and geopolitical headlines remain dominant, oil movements have the potential to remain volatile and sensitive to every new news.
Source: Newsmaker.id
