Crude oil futures rose Wednesday after two days of losses as Israel threatened to attack Iran if the Islamic Republic strikes Israel directly.
The West Texas Intermediate contract for May delivery gained 31 cents, or 0.36%, to $85.54 a barrel. June Brent futures added 28 cents, or 0.31%, to $89.70 a barrel.
The gains from geopolitical tensions were offset slightly by a hotter than expected inflation report. Oil prices pulled back after the consumer price index rose 0.4% for March and 3.5% over the previous year, compared with expected gains of 0.3% and 3.4%, respectively.
Israel warned OPEC member Iran Wednesday it would attack the Islamic Republic if Tehran strikes Israel.
“If Iran attacks from its territory, Israel will react and attack Iran,” Israeli Foreign Minister Israel Katz said on the social media platform X, tagging Supreme Leader Ayatollah Ali Khamenei.
Khamenei has threatened to punish Israel after Iran’s consulate in Damascus, Syria, was destroyed in a missile attack last week, killing seven Iranian military officials. Israel has not claimed responsibility for the strike, but the U.S. has assessed that Israel is responsible.
“Consulates and embassies of any country are regarded as the soil of that country. When they attack our consulate, it means that they have attacked our soil,” Khamenei said Wednesday in a speech in Tehran after leading prayers for the Eid al-Fitr holiday.
Oil prices haven fallen more than 1% this week as investors booked profits after last week’s rally. U.S. crude and the global benchmark have gained nearly 20% and 17%, respectively, this year as geopolitical tensions mount against the backdrop of a tightening global crude market.