Oil Surges After Trump Hints at Escalating Attacks on Iran
Oil prices rose sharply after US President Donald Trump said Washington would hit Iran “very hard” in the next two to three weeks. The statement rekindled market concerns about the sustainability of energy supplies, particularly through the Strait of Hormuz, a vital global oil shipping route.
Brent crude surged past US$105 per barrel, while West Texas Intermediate (WTI) rose near US$104 after Trump delivered a rare prime-time address. In his statement, Trump also said that countries dependent on oil through Hormuz should take a leading role in protecting shipping, claiming the route would reopen “naturally” after the war ends.
The conflict effectively closed the Strait of Hormuz, blocking supplies of crude oil, gas, and energy products like diesel to the global market. This situation has driven up energy prices and heightened concerns about an inflation crisis in several countries.
In recent days, oil prices have fallen due to optimism that the conflict could ease. However, Brent crude remains more than 40% higher than pre-war levels, suggesting the market believes the supply shock is not over. Several analysts believe Trump's speech has re-imagined the market for a more intense military campaign, while the final outcome of the conflict remains unclear.
Tensions over Hormuz remain a crucial issue for energy markets. Trump previously threatened to destroy Iran's infrastructure if the Strait of Hormuz were reopened, then called on other countries to take action to seize control of the Strait. The United Arab Emirates is among the Gulf states pushing for the United Nations to mandate the use of force to reopen the Strait.
From Iran's perspective, Foreign Minister Abbas Araghchi stated that the future of the Strait of Hormuz would be determined by Iran and Oman. Iran also asserted that the Strait would not be reopened simply because of the US President's "actions," indicating Tehran's continued intransigence and the potential for expanding supply areas.
The market also believes that normalization of shipping flows will not be rapid, even if the war ends within weeks. Damage to energy infrastructure is expected to take time to repair, while the accumulation of US troops in the region keeps the risk of escalation high. Amid the volatility, investors increased options trading to anticipate various price scenarios, while the International Energy Agency (IEA) warned that some countries could face energy rationing as supply shocks deepen this month. (asd)
Source: Newsmaker.id
