Oil prices surged by 7% following US President Donald Trump's continued threats to strike Iran "extremely hard" in the coming weeks. This escalation raises concerns about the uncertain outcome of the US-Iran conflict.
Market reports indicate that the price of Brent crude has risen to $107.60 per barrel. Additionally, Asian stock markets declined after Trump's address from the White House.
Just after the US-Iran war entered its fifth phase, Trump threatened to launch more attacks on Iran. He said the US would achieve its strategic objectives in the war within a few days. According to Trump, “The US will spend the next two to three weeks bombing Iran back to the Stone Age.”
The Iran war has severely disrupted global oil and gas supplies. Earlier on April 1, Wednesday, oil prices briefly dropped below $100 ahead of the speech on hopes that Trump would say how the US would exit the conflict. However, his address repeated the same points he had made earlier.
Oil prices, which had been fluctuating incrementally for the past few days, rose upward moments after the televised speech. West Texas Intermediate oil rose 6.4% to about $106.50. “The gains are a clear market reality check following the earlier optimism for an imminent ceasefire,” said Alberto Bellorin from InterCapital Energy.
Bellorin further explained that Trump's speech did not mention a ‘concrete timeline’ for reopening the Strait of Hormuz, and that returning to normal can take months rather than weeks. Trump has signaled that the war is likely to continue, prompting investors to expect that oil supplies will remain tight, said Tina Soliman-Hunter from Macquarie University.