NEW YORK, June 18 (Reuters) – Oil prices ended higher on Wednesday after a turbulent trading session, as investors assessed the risk of supply disruptions stemming from the ongoing Iran-Israel conflict and the possibility of direct U.S. involvement.
Brent crude futures edged up by 25 cents to settle at $76.70 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 30 cents to close at $75.14. Earlier in the day, both benchmarks had fallen by as much as 2%, following a sharp 4% surge in the previous session.
Iran’s Supreme Leader Ayatollah Ali Khamenei dismissed U.S. President Donald Trump’s call for unconditional surrender, while Trump declared his patience had worn thin—though he stopped short of revealing his next move.
Speaking to reporters outside the White House, President Trump declined to confirm whether he had decided to support Israel’s bombing campaign against Iran.
“I may do it. I may not do it. I mean, nobody knows what I’m going to do,” he said.
Trump added that Iranian officials had expressed interest in negotiations, including the possibility of a meeting at the White House, but remarked, “It’s very late to be talking.”
A source familiar with internal deliberations said one option under consideration by Trump and his advisors involves participating in strikes targeting Iranian nuclear facilities.
In a note, analysts at energy consultancy Ritterbusch and Associates commented, “Crude markets remain in a wait-and-see mode, with the Israel-Iran conflict presenting a wide range of uncertainties that could either push Brent prices as high as $83 per barrel or cause a sharp drop to around $68.”
Analysts warn that direct U.S. involvement in the Iran-Israel conflict could escalate the situation and place critical energy infrastructure across the region at greater risk of attack.
“The greatest concern for the oil market is the potential closure of the Strait of Hormuz,” ING analysts noted in a report. “Roughly one-third of global seaborne oil passes through this strategic chokepoint. A major disruption could drive prices as high as $120 per barrel.”
Iran, the third-largest producer in OPEC, currently pumps around 3.3 million barrels of crude oil per day.
Meanwhile, Iran’s ambassador to the United Nations in Geneva stated that Tehran has warned Washington it would respond decisively if the U.S. becomes directly involved in Israel’s military operations.
On the economic front, the U.S. Federal Reserve kept interest rates unchanged on Wednesday. While policymakers still expect to lower rates later this year, they signaled a more cautious pace of cuts amid concerns over rising inflation tied to the Trump administration’s proposed tariffs.
While Federal Reserve officials still expect to lower interest rates by a total of half a percentage point this year—consistent with their March and December projections—they have slightly adjusted the longer-term path, now forecasting just one 25-basis-point cut in both 2026 and 2027. This reflects a more gradual approach in their ongoing efforts to bring inflation back to the 2% target.
Lower interest rates typically stimulate economic activity and increase oil demand.
On the supply side, U.S. crude inventories declined sharply last week, falling by 11.5 million barrels to 420.9 million barrels, according to the Energy Information Administration. The drop far exceeded analysts’ expectations for a 1.8 million-barrel decrease.
