U.S. crude oil prices surged Tuesday after President Donald Trump issued a stark warning to Iran ahead of a self-imposed deadline for reopening the strategically vital Strait of Hormuz, a key route for global oil shipments.
U.S. crude jumped more than 3 percent to US$116.22 per barrel by late morning, while international benchmark Brent crude rose 0.8 percent to US$110.66 per barrel. The sharp gains reflect heightened market anxiety over the five-week-old conflict between Washington and Tehran, which has disrupted energy exports from the Persian Gulf.
Trump posted an ominous message on social media, declaring: “A whole civilization will die tonight, never to be brought back again. I don’t want that to happen, but it probably will.” He added that following what he described as “Complete and Total Regime Change” in Iran, “maybe something revolutionarily wonderful can happen. WHO KNOWS?”
The president repeated his threat to destroy Iranian power plants and bridges if Tehran failed to reopen the strait by 8 p.m. ET on Tuesday, while noting that Iranian officials appeared to be negotiating in good faith. A U.S. official confirmed that overnight strikes targeted military positions on Kharg Island, Iran’s main oil export hub.
The Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman, has been partially closed since February 28, triggering a supply shock that has driven crude, diesel, jet fuel, and gasoline prices higher. The strait typically handles around 20 million barrels of crude and products per day. According to S&P Global Market Intelligence, eight tankers transited Monday, up from fewer than two per day in March, but still far below normal levels.
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Negotiations between the U.S. and Iran are ongoing but remain fraught. Reuters reported that Tehran has rejected the U.S. ceasefire framework, presenting its own 10-point plan calling for a permanent end to hostilities, a protocol for safe passage through the strait, the lifting of sanctions, and regional reconstruction. Trump described the Iranian plan as “a significant step” but “not good enough.”
Market analysts said uncertainty continues to weigh heavily on prices. Ed Yardeni, president of Yardeni Research, said investors are caught between pricing in a potential end to the conflict and the risk of escalation. “There is no way to predict the outcome. The fog of war remains thick,” he said.
Shipping delays and logistical hurdles mean that even if the strait fully reopens, a full restoration of supply will take time, particularly for energy-hungry Asian economies facing imminent shortages. Michael Wan, senior currency analyst at MUFG Research, estimated that a complete normalization of flows could take three to six months.
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Analysts warn that the crisis is reshaping global oil markets. With supplies constrained and uncertainty high, energy prices are likely to remain elevated in the near term, adding pressure to inflation and energy security worldwide.
As the deadline approaches, markets remain on edge, closely monitoring both diplomatic developments and potential military actions that could further affect the flow of crude through one of the world’s most critical maritime chokepoints.
