Oil jumps as traders rebuild a Middle East risk premium.
Brent crude climbed about 1.3% to around $71.26 a barrel on February 19, 2026, while U.S. WTI rose about 1.4% to roughly $66.09. The move extended a sharp prior-day surge of more than 4%. Reuters linked the rally to “concerns of potential US-Iran conflict.” [https://www.reuters.com/business/energy/oil-prices-dip-investors-assess-trajectory-us-iran-tensions-2026-02-19/
##) What’s driving the move
Oil jumps tend to be about supply risk, not demand optimism. This time, headlines pushed traders to pay up for insurance.
Reuters reported that escalating military activity and fragile diplomacy drove the latest leg higher. The market also reacted to signs of limited progress in talks and to fresh regional security signals. [https://www.reuters.com/business/energy/oil-prices-dip-investors-assess-trajectory-us-iran-tensions-2026-02-19/
A) companion Reuters analysis described the current “Iran premium” as meaningful but still contained. Analysts cited in that piece estimated a risk premium of roughly $7 to $10 a barrel. That implies traders still assume no sustained disruption. [https://www.reuters.com/markets/commodities/crude-oils-current-iran-premium-assumes-no-supply-disruption-2026-02-19/
##) Why the Strait of Hormuz is back in focus
Oil jumps quickly when the Strait of Hormuz dominates the narrative. The reason is structural.
The U.S. Energy Information Administration (EIA) describes Hormuz as the world’s most important oil transit chokepoint. In 2024, flows through the strait averaged about 20 million barrels per day, roughly 20% of global petroleum liquids consumption. [https://www.eia.gov/todayinenergy/detail.php?id=65504
That](https://www.eia.gov/todayinenergy/detail.php?id=65504
That) concentration creates a volatility trigger. Even a short disruption can push freight rates, insurance costs, and prompt-month spreads higher.
What the price action is saying
Oil jumps are also a signal about market positioning.
Both Brent and WTI neared multi-month highs in the Reuters report. Yet the same Reuters analysis stressed that the market is not priced for a worst-case scenario. Traders appear to be pricing two broad outcomes:
A diplomatic path that cools the risk premium.
Limited conflict that avoids sustained damage to oil infrastructure.
A prolonged disruption would likely require a different price level and a different curve shape. For now, the premium looks headline-driven. [https://www.reuters.com/markets/commodities/crude-oils-current-iran-premium-assumes-no-supply-disruption-2026-02-19/
##) Why it matters for inflation and policy
Oil jumps feed into inflation expectations with a lag that can be fast.
Higher crude lifts refined product prices, freight costs, and input costs for manufacturers. It also raises energy import bills for emerging markets. Those channels can keep central banks cautious, especially if headline inflation re-accelerates.
The risk is a familiar loop. Oil jumps lift inflation prints. Inflation risk lifts yields. Tighter financial conditions then weigh on growth, while energy-sensitive sectors face margin pressure.
What to watch next
Oil jumps could fade if headlines cool. They could extend if supply risk looks more durable.
Key signals to monitor:
Any verified impact on shipping, insurance pricing, or transit behavior near Hormuz.
Official statements that change the perceived probability of conflict.
Evidence that physical flows are tightening, such as sustained backwardation or rising differentials.
For now, the market is paying for protection rather than pricing a shutdown. That distinction matters for how far oil jumps can run.