Oil Surges Nearly 7% as Trump Threatens Escalation, Renewing Supply Shock Fears

Oil prices jumped sharply on Thursday, as renewed geopolitical tensions in the Middle East fueled concerns over prolonged supply disruptions and drove a fresh risk premium into energy markets.

Brent crude futures for June delivery surged 6.8% to $108.01 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 5.8% to $105.91 per barrel as of 00:11 ET (05:40 GMT). The gains reversed earlier losses, with both benchmarks initially opening lower after declines in the previous session.

Escalation Threats Lift Oil Markets

The rally followed comments from Donald Trump, who signaled a significant intensification of U.S. military operations against Iran in the coming weeks.

In a televised address, Trump warned that the United States would strike Iran “extremely hard” over the next two to three weeks, citing the need to prevent Tehran from advancing its nuclear ambitions. His remarks marked a shift back toward a more aggressive stance after earlier signals suggesting a possible withdrawal from the conflict.

While Trump acknowledged that discussions were ongoing, he offered no clear indication that a ceasefire was imminent, leaving markets uncertain about the trajectory of the conflict.

Conflicting Signals on Diplomacy

Earlier in the week, Trump had suggested that the U.S. could exit the conflict within a similar timeframe, even without a formal agreement, which had briefly weighed on oil prices.

He also indicated in a social media post that Iran’s leadership had sought a ceasefire, hinting at a potential diplomatic opening. However, Iran’s foreign ministry denied these claims, reinforcing uncertainty around any near-term resolution.

The mixed messaging from both sides has contributed to heightened volatility in oil markets.

Hormuz Disruption Remains Key Risk

Investor focus remains centered on the Strait of Hormuz, a critical chokepoint through which roughly one-fifth of global oil supply flows.

The waterway continues to face significant disruption, with no clear timeline for a normalization of tanker traffic. This ongoing constraint has been a major driver of elevated oil prices, as markets price in the risk of sustained supply shortages.

Inventory Build Offers Limited Relief

On the supply side, data from the Energy Information Administration showed that U.S. crude inventories rose by approximately 5.5 million barrels in the week ending March 27, exceeding expectations for a smaller increase.

However, the bearish impact of higher inventories was overshadowed by geopolitical developments, as traders remained focused on supply risks tied to the Middle East conflict.

Market Outlook

Oil markets are increasingly driven by geopolitical headlines, with escalating tensions and uncertain diplomatic progress fueling sharp price swings.

As long as disruptions in key transit routes persist and military risks remain elevated, crude prices are likely to stay volatile, with upside risks dominating in the near term.