BEIJING, June 18 (Reuters) - Oil prices ticked up in

early trading on Wednesday after ending the previous session up

more than 4% on worries that the Iran-Israel conflict could

disrupt supplies.

Brent crude futures rose 19 cents, or 0.25%, to

$76.64 a barrel by 0029 GMT. U.S. West Texas Intermediate crude

futures rose 23 cents, or 0.31%, to $75.07 per barrel.

U.S. President Donald Trump on Tuesday called for Iran's

"unconditional surrender" as the Iran-Israel air war entered a

sixth day.

The U.S. military is deploying more fighter aircraft to the

region to bolster its forces, three officials said on Tuesday.

Analysts said the market was largely worried about supply

disruptions in the Strait of Hormuz, which carries a fifth of

the world's seaborne oil.

Two oil tankers collided near the strait and caught fire on

Tuesday. The United Kingdom Maritime Trade Operations had warned

on Monday that electronic interference is affecting ships'

navigation systems.

Iran is OPEC's third-largest producer extracting about 3.3

million barrels per day (bpd) of crude oil, but analysts say

other members of the Organization of the Petroleum Exporting

Countries could use their spare capacity to make up for a drop

in Iranian output.

Markets are also looking ahead to a second day of U.S.

Federal Reserve discussions on Wednesday, in which the central

bank is expected to leave its benchmark overnight interest rate

in the 4.25%-4.50% range.

However, the conflict in the Middle East and the risk of

slowing global growth could push the Fed to potentially cut

rates by 25 basis points in July, sooner than the current market

expectation of September, said Tony Sycamore, market analyst

with IG.

"The situation in the Middle East could become a catalyst

for the Fed to sound more dovish, as it did following the

October 7, 2023, Hamas attack," Sycamore said.

Lower interest rates generally boost economic growth and

demand for oil.

Confounding the decision for the Fed, however, is that the

Middle East conflict also creates a new source of inflation via

surging oil prices.

U.S. crude and gasoline stocks fell last week while

distillate inventories rose, market sources said, citing

American Petroleum Institute figures on Tuesday.