Oil prices extend gains as Trump sharpens rhetoric on Iran

Oil prices extended gains on Tuesday as Donald Trump intensified his rhetoric against Iran, warning of stronger military action if the country fails to reopen the strategically critical Strait of Hormuz—a vital artery for global energy supplies.

Brent crude futures rose by 57 cents, or 0.5%, to $110.34 per barrel as of 1202 GMT. Meanwhile, U.S. West Texas Intermediate crude futures climbed $1.26, or 1.1%, to $113.67 per barrel, reflecting heightened geopolitical risk premiums in energy markets.

President Trump warned that Iran could face severe consequences if it does not comply with his deadline of 8 p.m. EDT Tuesday to reopen the strait. He stated that Tehran could be “taken out,” and threatened to “rain hell” on the country if no agreement is reached.

In response to a U.S. proposal conveyed through Pakistan acting as mediator, Iran rejected a ceasefire offer. Iranian officials instead insisted that any resolution must include a permanent end to the ongoing war, while resisting mounting international pressure to restore passage through the strait.

Iranian forces effectively shut the Strait of Hormuz after U.S. and Israeli attacks began on February 28. The waterway typically handles around 20% of global oil flows, making its disruption a major shock to international energy markets.

Tim Waterer, chief market analyst at KCM Trade, noted that timing and geopolitical developments are now playing a critical role in price movements.
“Clock-watching is now playing almost as big a role in oil markets as the fundamentals themselves in the run-up to Trump’s ultimatum deadline,” he said.

He added that while the possibility of a ceasefire could trigger a short-term drop in prices, persistent supply concerns tied to the Hormuz chokepoint and damaged energy infrastructure continue to support elevated price levels.

On Monday, Iran’s Islamic Revolutionary Guard Corps halted two liquefied natural gas tankers from Qatar, instructing them to hold position without explanation, according to sources cited by Reuters.

Shipping data indicates that vessel movement through the strait has remained extremely limited since last Thursday, underscoring the severity of the disruption and its impact on global energy logistics.

The United Nations Security Council is expected to vote on a resolution aimed at protecting commercial shipping through the Strait of Hormuz. However, the proposal has reportedly been significantly diluted after opposition from China, which holds veto power and resisted measures authorizing the use of force.

The broader regional conflict continues to escalate. Explosions were reported in Damascus and surrounding areas on Tuesday, attributed to Israeli interception of Iranian missiles, according to Syrian state television.

At the same time, Saudi Arabia announced that it had intercepted and destroyed seven ballistic missiles targeting its Eastern Region. Debris reportedly fell near key energy infrastructure, raising concerns about potential disruptions to oil production and exports.

The ongoing conflict has placed significant upward pressure on global crude markets. Spot premiums for U.S. WTI crude have surged to record highs as refiners in Asia and Europe scramble to secure alternative supplies amid disruptions in Middle Eastern exports.

State oil giant Saudi Aramco raised the official selling price of its Arab Light crude for May delivery to Asia, setting a record premium of $19.50 per barrel above the Oman/Dubai benchmark.

Further compounding supply concerns, Russia reported that Ukrainian drones attacked infrastructure linked to the Caspian Pipeline Consortium on the Black Sea. The facility, which handles approximately 1.5% of global oil supply, sustained damage to loading systems and storage tanks.

The OPEC+ alliance agreed on Sunday to increase oil production quotas by 206,000 barrels per day for May. However, analysts note that the increase may be largely symbolic, as several member countries are unable to boost exports due to the closure of key transit routes such as the Strait of Hormuz.

With geopolitical tensions escalating, critical infrastructure under threat, and one of the world’s most important oil transit routes effectively blocked, global energy markets remain on edge.

The coming hours—particularly around President Trump’s ultimatum deadline—are expected to be pivotal in determining whether oil prices continue to climb or retreat on signs of diplomatic progress.