Oil Prices Surge as President Trump Signals Continued Military Action Against Iran

Oil prices surged in early Asian trading on Thursday after President Donald Trump indicated that the United States would persist with its military campaign against Iran, including potential strikes on energy infrastructure. Prior to the speech, prices had declined on expectations of de-escalation, but they spiked sharply when Trump made it clear the conflict would continue.

At the time of writing, West Texas Intermediate (WTI) crude was trading at $105.2 per barrel, up 5.07%, while Brent crude stood at $107.3, up 6.04%. Before the speech, prices had dropped on expectations of de-escalation, leading to a sharp spike when Trump made it clear the war would continue.

Trump stated that the U.S. was going to "finish it very fast," but he failed to offer any concrete timeline for a ceasefire and then went on to list the length of previous U.S. wars. For traders, the message was clear that the risk of further escalation remains firmly on the table.

The rally underscores how tightly oil markets are now tethered to geopolitical developments in the Middle East, and specifically the opening of the Strait of Hormuz. Tensions escalated further this week when an oil tanker leased to QatarEnergy was struck by an Iranian cruise missile in Qatari waters. This was shortly after a Kuwaiti oil tanker had been hit while anchored at Dubai port.

The latest price spike reflects a market increasingly concerned that disruptions could extend well beyond initial expectations, further adding to the structural tightness in markets. The International Energy Agency has warned that supply disruptions will worsen sharply in April as pre-war cargoes are exhausted, removing a key buffer that had supported markets in March. That warning is now being taken more seriously.

Brent had briefly dipped below $100 before Trump took to the stage, but the lack of clarity and renewed threats quickly reversed that trend. Equities in Asia turned lower following the speech, with South Korea’s Kospi dropping more than 2%, while futures for U.S. and European indices also slid, reflecting broader concerns about energy-driven inflation and economic drag.

For oil markets, this is rapidly becoming a structural supply story rather than one of geopolitical risk, meaning attempts to jawbone prices lower are likely to be less and less successful.