US-Iran Tensions Persist, Brent Crude Tops $95 a Barrel for First Time in Six Weeks

TradingKey - As Middle East tensions continue to escalate, the international crude oil market has once again been severely impacted. Driven by rising geopolitical risks, international oil prices surged on the 22nd, with WTI crude oil futures ( UKOIL-F) at one point rose 4.28% to $88.17 per barrel; Brent crude oil futures ( USOIL-F) broke through $95 per barrel, returning to this level for the first time since June 11.

Source: TradingView

Source: TradingView

US, Iran Hardline Stance, Conflict Risks Continue to Accumulate

During the ASEAN Foreign Ministers' Meeting held in the Philippines, US Secretary of State Marco Rubio emphasized that the US still prioritizes diplomatic channels, but at the same time accused Iran of violating previous consensuses on strait security, warning that if Tehran has no intention of promoting meaningful negotiations, the US will take necessary measures to safeguard the interests of the US and its allies.

Meanwhile, US President Trump's latest remarks have once again shifted public focus from the Strait of Hormuz to the Iranian nuclear issue.

He stated that the US is closely monitoring the latest developments regarding Iran's nuclear facilities, and if Iran resumes construction of relevant nuclear facilities, the US will not hesitate to launch strikes, targeting not only the so-called "Kuh-e Kolang Gaz" underground nuclear facility but also any targets that could serve Iran's nuclear program.

In response, Iran reacted swiftly. The Khatam al-Anbiya Central Headquarters of the Iranian Armed Forces stated that any US attack on Iranian nuclear facilities would be viewed as a further escalation of regional conflict and could trigger a larger-scale military response. As rhetoric escalates on both sides, market concerns over a further deterioration of the situation in the Middle East continue to ferment.

The "Kuh-e Kolang Gaz" facility mentioned by Trump is located approximately 220 kilometers south of Tehran and only about 2 kilometers from the Natanz uranium enrichment facility. Natanz was attacked twice during past rounds of regional conflict, and construction of the "Kuh-e Kolang Gaz" facility began precisely after the damage to Natanz.

Public records show that construction on the project began in 2020, with Iran hoping to leverage the natural barrier of the mountain to build more secure nuclear facilities for the production and deployment of advanced centrifuges.

An analysis by the US think tank, the Institute for Science and International Security (ISIS), suggests that the facility is buried more than 100 meters underground, has multiple entrances and exits, and likely features a multi-layered structure. Its protective capabilities are far superior to those of ordinary underground facilities, which is why it has long been regarded as an important component of Iran's nuclear program.

As Trump publicly singled out the facility, concerns have grown that the Iranian nuclear issue could once again become a new trigger for the escalation of regional tensions.

Peace Talks Stall, Market Reprices Inflation Risks

Analysts believe that against the backdrop of the long-delayed substantive progress in US-Iran negotiations, market trading logic has once again returned to supply risks and inflation expectations.

Deutsche Bank analyst Jim Reid pointed out that Brent crude reclaimed $90 per barrel after more than a month and briefly broke through $92, reflecting that the market is pricing the Middle East geopolitical risk premium back in.

Meanwhile, the continuous expansion of military operations by the US military has also left oil prices without clear momentum for a pullback in the short term, and investor concerns over a rebound in global inflation and stagflation risks have intensified.

However, Iran has still released limited signals of de-escalation. A spokesperson for the Iranian Ministry of Interior stated that while the two sides have not initiated formal negotiations at present, communication through informal channels remains possible. This means that although the diplomatic window has not completely closed, US-Iran relations are still unlikely to see substantive improvement in the short term, and international oil prices may continue to be driven by developments in the Middle East.