Global oil prices climbed sharply on Tuesday, hovering near multi-year highs as tensions between the US and Iran escalated ahead of a critical diplomatic deadline set by President Donald Trump. Brent crude rose 1.3% to trade above $111 per barrel, while US benchmark WTI rose 4% and hovered near $117, as markets reacted to the heightened risk of supply disruptions.
Despite signalling that negotiations with Iran were progressing, Trump simultaneously sharpened his rhetoric, warning of severe military consequences if Tehran fails to comply before the Tuesday evening deadline. Among the priorities outlined was ensuring the reopening of the Strait of Hormuz, a crucial artery for global oil shipments.
The US President issued another threat to Iran on Tuesday as his deadline to open the Strait of Hormuz looms. “A whole civilization will die tonight, never to be brought back again”, he said, in a post on his Truth Social platform.
He warned that US stands by its Tuesday deadline to wipe out Iran.
“I don't want that to happen, but it probably will. However, now that we have Complete and Total Regime Change, where different, smarter, and less radicalized minds prevail, maybe something revolutionarily wonderful can happen”, he continued.
“WHO KNOWS? We will find out tonight, one of the most important moments in the long and complex history of the World. 47 years of extortion, corruption, and death, will finally end. God Bless the Great People of Iran!”.
The US president also hinted at potential strikes on critical Iranian infrastructure, including bridges and power facilities — a move that could significantly escalate the conflict and raise legal and humanitarian concerns globally.
Iran, in response, has warned it could target energy infrastructure across the Persian Gulf, raising the risk of a broader regional disruption with far-reaching implications for global energy markets.
The ongoing conflict, now stretching into its sixth week, has already rattled crude markets. Traders are increasingly pricing in the risk of tighter supplies, particularly as buyers scramble to secure US crude shipments.
The prompt spread for WTI — a key gauge of near-term supply tightness — surged close to record levels, signalling strong demand for immediate deliveries. Analysts caution that while markets appear to be bracing for a resolution, the outcome may not necessarily ease volatility. Any escalation into direct military action could deepen the supply shock and intensify pressure on the global economy.
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