Oil prices jumped sharply Thursday as a fresh round of inflammatory rhetoric from US President Donald Trump and reciprocal threats from Iranian officials rekindled fears the conflict could escalate, tightening near-term oil supplies and unsettling global markets. Brent crude, the international benchmark, climbed 6.6% to $107.80 a barrel, while West Texas Intermediate briefly surged to $113 before settling about 11% higher on the day at roughly $111 a barrel.
The move followed a televised White House address in which Trump said the war against Iran was “nearing completion” and warned the United States would “hit Iran extremely hard over the next two to three weeks.” He renewed a threat to bomb Iranian power plants if Tehran failed to meet US demands and signaled he might allow the conflict to end without restoring shipping through the Strait of Hormuz, suggesting that nations “desperately dependent” on the strait should shoulder that responsibility.
Tehran responded by threatening “more extensive and destructive actions,” raising market concerns that further attacks or countermeasures could disrupt crude flows through one of the world's busiest oil chokepoints. Analysts say that threat, even without immediate physical disruption, is enough to add a premium to near-term deliveries. “There is currently a premium on barrels that can be delivered sooner — this is in fact exacerbated with Trump signaling escalation last night,” Joel Hancock, senior commodities analyst at Natixis Corporate and Investment Banking, told CNN. He added that futures are now more reflective of a tighter oil supply.
The technical structure of the market underscored that shift. Thursday’s WTI price corresponds to oil for delivery in May, while Brent reflects June delivery, a divergence traders interpret as a “front-month” premium when near-term supply risk rises. That dynamic can amplify price swings as market participants rush to cover shorter-dated contracts.
Equity markets fell in parallel with the oil surge. Asian shares were broadly lower, led by South Korea’s Kospi, which closed 4.5% down. Major European indexes traded overwhelmingly in the red, and leading US benchmarks were lower as investors pared earlier-week gains that had been fueled by hopes the fighting would end quickly. Deutsche Bank analysts said market sentiment “deteriorated overnight” after Trump’s address, criticizing the speech for providing no clarity on timelines or conditions for ending hostilities and noting “there was no signal of the US seeking an imminent offramp out of the war.”
While the United States — now the world’s largest oil producer — imports almost no oil through the Strait of Hormuz, it still takes specific grades and remains exposed to movements in a global benchmark market. Traders and refiners in Asia and Europe, which rely more heavily on shipments through Hormuz, are considered more vulnerable to any physical interruptions. The specter of retaliatory strikes, disruptions to shipping, or targeted attacks on infrastructure has pushed short-term risk premiums higher, injecting renewed volatility into both commodity and equity markets.
With headlines and rhetoric driving price swings, market participants will be watching for any operational impacts on shipping and for further statements from Washington and Tehran that could either intensify the risk premium or calm nerves.