Oil traders are betting the Iran war is not ending soon, and the price action is telling them that's the right bet. Brent crude is up seven straight sessions, and WTI has run nearly 50% in two months.
The latest leg comes from two new pressures hitting the market at once - a possible US blockade of Iranian ports and the UAE walking out of OPEC.
Brent crude futures climbed 2.8% to $114.37 a barrel by 7:18 a.m. ET on Wednesday, marking a seventh straight positive session.
WTI crude rose 3.3% to $103.18 a barrel after settling 3.7% higher Tuesday, and the benchmark is up more than 49% since the US and Israeli-led war against Iran began on Feb. 28.
The current run is not just generic war risk. It's traders pricing in a longer conflict, with no signs of the Strait of Hormuz reopening soon and no fresh round of negotiations on the calendar.
A 49% jump in any commodity in two months is rare, but for an asset as central to the global economy as crude oil, it's the kind of move that resets every other price tied to it - from gasoline to airline tickets to chemical inputs.
President Donald Trump posted on Truth Social Wednesday that Iran "better get smart soon!" and accused Tehran's leadership of failing to "get their act together."
The Wall Street Journal reported Tuesday, citing US officials, that the US is preparing to extend its blockade of Iranian ports. That step would block shipping in and out of Iran entirely, on top of the already-shut Strait of Hormuz.
Iran-US negotiations to end the war have stalled in recent days, with no fresh meetings scheduled, and traders read the silence as more upside risk for prices.
The other story moving prices is what just happened to OPEC, with the United Arab Emirates officially leaving the cartel on May 1.
ING strategists called the move "a big blow" to OPEC and said Trump would welcome it because the exit "erodes OPEC's influence in the oil market" and helps importers and consumers.
ING also said the UAE story is not the main driver right now. "In the near term, the biggest driver for oil prices remains developments in the Persian Gulf and the timing of a resumption in oil flows through the Strait of Hormuz," they wrote.
The UAE was one of the cartel's most influential producers, and traders will watch whether any other member follows it out the door. A second exit would change the math on global supply far more than the first, and Trump's repeated criticism of OPEC could start to look like more than just rhetoric if other producers head for the exit.
Whether Trump moves on the Iranian port blockade and whether the Strait of Hormuz reopens to traffic. Whether any other OPEC member follows the UAE out the door.
After seven up sessions and a 49% run since Feb. 28, the market is not expecting a quick resolution.