US Crude Prices Surge 11% Following Trump's Threats Against Iran

Global Oil Prices Soar Amid Escalating Tensions with Iran

U.S. oil prices jumped more than 11% on Thursday, while Brent crude futures soared 7% in volatile trading, as traders grew increasingly concerned about prolonged disruptions to oil supply following President Donald Trump's statement that the U.S. would continue attacks on Iran.

Brent crude futures rose $6.34, or 6.3%, to $107.5 a barrel at 1610 GMT (12:10 a.m. ET), with U.S. West Texas Intermediate crude futures up $11.19, or 11.15%, at $111.27 per barrel. Notably, WTI hit a session high of $113.97 a barrel, its biggest absolute price rise since 2020.

As a result, WTI is pricing nearly $3 over Brent, representing the highest premium U.S. crude futures have commanded over the global benchmark in a year. Despite this, both benchmarks remained below highs near $120 a barrel touched earlier in the conflict.

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President Trump's statement, which did not specify a timeline for ending hostilities, sparked concerns about the potential for further supply disruptions. Trump vowed to "hit them extremely hard over the next two to three weeks" and bring Iran "back to the Stone Ages where they belong."

In an effort to alleviate concerns, Iran is drafting a protocol with Oman to monitor traffic in the Strait of Hormuz. However, the Strait's status remains uncertain, with dozens of countries seeking ways to restart vital energy shipments through the waterway.

Market analysts are bracing for a prolonged impact on oil supplies, with Dennis Kissler, senior vice president of trading at BOK Financial, stating that "crude futures are trading sharply higher in early trade as the near-term war sentiment has turned to further escalation before de-escalation." Kissler noted that traders are concerned about the potential damage to Iran's oil infrastructure and the subsequent delay in oil flows in the region.

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Federal Reserve Bank of Dallas President Lorie Logan suggested that a swift war resolution may mitigate economic impact, but acknowledged that the economic outlook remains uncertain due to the crisis. Logan also pointed out that the U.S. has some buffers to impacts from the war.

Brent crude prices are expected to average $95 a barrel in the base case and $130 a barrel in the bull case in the second half of the year, according to a forecast by Citi.

In a separate development, Britain is hosting a virtual meeting of around 40 countries to discuss options for reopening the Strait of Hormuz, with the U.S. not due to attend. Meanwhile, OPEC+ is likely to weigh a further oil output increase on Sunday, positioning members to add more barrels should the Strait of Hormuz reopen.

Additionally, Ukraine's strikes on port infrastructure, pipelines, and refineries have reduced export capability by 1 million barrels per day, or a fifth of total capacity, sources say. This has set the stage for imminent production cuts in Russia. The head of the International Energy Agency also warned that supply disruptions would start to affect Europe's economy in April, after the region had previously been shielded by cargoes contracted before the start of the war.