Oil prices climbed sharply on Thursday after Donald Trump signaled further military action against Iran, raising concerns about supply disruptions through a key global shipping route.
Brent crude rose by 8% on Thursday morning to pass US$109 per barrel. The rebound followed losses on Wednesday, when the benchmark briefly fell below US$100 amid expectations of easing tensions.
US crude also moved higher. West Texas Intermediate increased by 11% to reach US$111.60 per barrel.
The price reaction came after Trump addressed the nation on Wednesday evening, outlining the United States’ position in the ongoing conflict. He said, “We are on track to complete all of America’s military objectives shortly, very shortly.” He added that the US would hit Iran “extremely hard” over the next two to three weeks.
Trump indicated that conditions in the region would stabilize after the conflict. He said the Strait of Hormuz “will open up naturally.”
The last time oil prices were this high was the 2022 Ukraine war | OilNOW
The Strait of Hormuz remains central to market concerns, as it serves as passage for a significant share of global oil exports.
Daniel Yergin, Vice Chairman of S&P Global, described the situation as unprecedented. He said the disruption in tanker traffic through the Strait of Hormuz represents “the largest disruption to global oil production ever recorded.”
The conflict has drawbacks for Guyana which has experienced a 38.5% jump in gasoline import prices, sending up costs for consumers.
