08:53 AM EDT, 06/18/2025 (MT Newswires) -- Oil prices rose to a five-month high early on Wednesday as Israel and Iran continue an air war while the Trump Administration ponders entering the conflict in order to destroy Iran's nuclear-weapons program.

West Texas Intermediate crude oil for July delivery was last seen up US$0.40 to US$75.24, the highest since Jan.21, while August Brent crude was up US$0.23 to US$76.68.

Oil prices have climbed 10% since Israel last week launched a surprise attack on Iran in an attempt to end that country's nuclear ambitions, while the two countries continue air attacks. U.S. President Donald Trump called for Iran's leadership to unconditionally surrender even as reports say his administration is considering entering the fight in order to destroy Iran's ability to produce enriched uranium for nuclear weapons.

Still, the fighting has not significantly impacted Iran's oil exports, while Iran has refrained from disrupting shipping in the Persian Gulf, a region that supplies around 20% of the world's oil demand, even as traders fret over the potential for a wider, more intense war that will cut into oil supply.

"Israel has not yet targeted Iran's key oil export and production facilities, such as the massive Kharg Island terminal, which handles approximately 90% of the country's crude oil exports. However, if Israel is unable to dismantle the nuclear program to its satisfaction, it may try to bankrupt Iran by targeting its main source of revenue. If Iran were unable to export oil through the Strait of Hormuz, it could retaliate by making it extremely difficult-if not impossible-for other nations to do so," Angelo Katsoras, geopolitical analyst at the National Bank of Canada, wrote.

A sharp drop in U.S. oil inventories last week is also supporting prices. In its weekly survey, the American Petroleum Institute reported U.S. oil inventories fell by 10.13-million barrels last week, well more than the consensus estimate for a drop of 0.6-million barrels among analysts polled by Oilprice.com. The Energy Information Administration will release official inventory data later on Wednesday morning.