Crude surges as Iran war fears deepen

Oil prices leapt on Thursday after President Donald Trump said the United States would keep striking Iran for at least the next two to three weeks, dashing hopes that Washington was preparing to scale back military action and easing concerns in energy markets only briefly. Brent crude rose above $108 a barrel and West Texas Intermediate climbed past $106 in early trade, reversing the previous session’s pullback as traders priced in a greater risk of prolonged disruption to Middle East supply routes.

Trump’s remarks, delivered in a televised address late on Wednesday, appeared to sharpen rather than calm market nerves. While he said the conflict was “nearing completion”, he also pledged that U. S. forces would hit Iran “extremely hard” over the coming weeks and gave no clear roadmap for ending the war or restoring normal shipping conditions through the Strait of Hormuz. That waterway carries roughly a fifth of global oil consumption, making any threat to tanker traffic an immediate concern for refiners, insurers and governments across Asia and Europe.

Market reaction reflected more than presidential rhetoric. Investors had entered the speech hoping for firmer language on de-escalation after earlier signals from Washington suggested the campaign might wind down within weeks. Instead, the absence of a ceasefire timetable, combined with Trump’s warning that energy and oil-related targets remained in scope, fed expectations that supply risks could intensify before they ease. Reuters reported that an Iranian missile had struck a QatarEnergy-leased tanker in Qatari waters, an incident that added urgency to fears over maritime security in the Gulf.

Those concerns are now being transmitted far beyond crude futures. Asian equity markets fell sharply, with investors moving away from risk assets as higher oil threatened to deepen inflation pressure and complicate interest-rate expectations. AP reported steep declines in benchmark indexes across Japan, South Korea and other regional markets, while the stronger U. S. dollar signalled a broader flight to perceived safety. In Britain, fuel prices and mortgage expectations also came under pressure as traders reassessed the economic cost of a longer conflict.

Price action in oil has become especially volatile because the market is trying to balance two competing narratives. One is that military escalation could keep supply constrained, shipping costs elevated and physical deliveries disrupted across the Gulf. The other is that the conflict may still prove short-lived if Washington secures a strategic objective quickly or if diplomatic pressure forces a pause. Thursday’s jump suggested traders were giving more weight to the first scenario after Trump’s speech failed to offer reassurance on timing, targets or a post-conflict framework.

The scale of the move also reflects how sensitive oil markets have become to any threat around Hormuz. The strait is not only vital for crude exports from Saudi Arabia, Iraq, Kuwait, the UAE and Iran, but also for liquefied natural gas shipments, including those from Qatar. Even when physical flows continue, the risk premium can rise quickly because shipowners, insurers and commodity buyers must factor in the possibility of missile attacks, naval confrontation or tighter military control of transit lanes. That dynamic tends to push spot prices, freight rates and hedging costs higher at the same time.

Analysts are also watching whether the shock begins to spill more forcefully into consumer prices and industrial supply chains. The International Energy Agency has warned that disruptions linked to the conflict could start hitting Europe’s economy from April as previously secured oil cargoes are exhausted. Higher crude prices also feed into diesel, aviation fuel, petrochemicals and transport costs, raising the risk that central banks could face another inflation impulse just as many economies were trying to steady growth.