Here's what's behind oil's 8-day climb back near Iran-war highs

• Oil prices are up almost 30% in eight days as hope for a near-term peace deal fades.
• Crude prices tumbled after the ceasefire, but have steadily climbed back toward recent highs.
• Energy experts see consequences like higher prices and supply hoarding if the conflict drags on.

Markets have been laser focused on the coming wave of tech earnings and the Fed, but oil has quietly been on a multi-day streak of gains.

After cooling on renewed peace prospect following the ceasefire earlier this month, oil prices have moved sharply higher in the last week. The move has largely reflected waning hopes for a peace deal with Iran, with traders pricing in the pain of an extended conflict that could further tighten global supply.

Brent crude, the international benchmark, surged 6% on Wednesday to $117.80 a barrel, nearing the wartime high just under $120. West Texas Intermediate crude was also up 6% to $106.30 a barrel.

Crude prices began to tumble earlier this month, after the US and Iran first reached a ceasefire and President Donald Trump assured markets that the war would be over soon.

At the time, oil prices were likely reflecting an overly optimistic outcome of the Iran war, Bob McNally, the president of Rapidan Energy Group and a former White House energy advisor, told Business Insider.

"There was this sort of confidence in the market that the worst was behind us," McNally told Business Insider this week. "Markets are forward-looking, but they're not always correct, right?"

But the oil market is now feeling more pain as war enters its third month, with flows still being choked off in the Strait of Hormuz. The world's oil supply plunged by around 10 million barrels a day in March, marking the largest "disruption in history," according to a recent report from the International Energy Agency.

Uncertainty over how long the war will last has added to the upwards pressure on prices. The oil rally accelerated on Tuesday on a report that Trump was dissatisfied with Iran's latest peace proposal.

Prices jumped again on Wednesday after the Wall Street Journal reported that Trump told his team to prepare for an extended blockade of Iran.

The increase in prices is likely investors responding to the "lack of progress" in ending the Iran war, David Morrison, a senior market analyst at Trade Nation, wrote in client note on Wednesday.

He pointed to how prices for short-term oil contracts were rising over prices for long-term oil contracts.

"This is an expression of the tightness in supply for immediate/ near-term delivery compared to later this year when traders expect the pressure to dissipate due to the war ending," Morrison added.

Top economist Mohamed El-Erian said that the timeline for the Iran war is a "volatile wildcard," with conflict potentially lasting for several more months.

"The central question of this high-stakes economic 'game of chicken' is which side will blink first," he wrote in a LinkedIn post about the US blockade of the Strait. "Iran is imposing economic dislocations on the US and, more consequentially, on most of the rest of the world," he added.

McNally said he only saw a one-in-five chance that the US would be able to reopen the Strait of Hormuz through a peace deal. He speculated the market could soon see a "mad scramble" for available reserves as supply runs low, leading to a global hoarding problem that will push prices up further.

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