Alexander Manzyuk | Reuters
Brent crude hit a four-year high on Thursday after reports that the U.S. military would brief President Donald Trump on possible action against Iran, raising fears that the armed conflict could flare up again, building on the American blockade of Iranian exports.
Axios reported that U.S. Central Command should present Trump with plans for possible military action against Iran, citing two sources familiar with the matter.
Trump had done it before Reportedly rejected Tehran’s proposal to reopen the Strait of Hormuz, thereby announcing the naval blockade, remains in place until a broader nuclear deal is reached.
June futures for international benchmark Brent Crude oil rose 6.84% to $126.10 a barrel at 12:22 a.m. ET, while U.S. crude rose 6.84% to $126.10 a barrel West Texas Middle School rose 3.14% to $110.24.
Brent oil prices
Brent crude has risen to its highest level since early 2022, LSEG data shows, as the Middle East conflict chokes supplies.
Goldman Sachs estimates that exports through the Hormuz chokepoint have fallen to just 4% of normal levels as U.S.-Iran negotiations have stalled and a prolonged U.S. blockade has tightened supplies.
Restricted Iranian exports and limited storage capacity could worsen supply disruptions if the blockage continues, the bank’s analysts said, adding that the increase in production from the United Arab Emirates after leaving OPEC is likely to come gradually in the medium term rather than offset short-term shortages.
Trump appeared to threaten Iran Truth Social post on WednesdayHe told the country: “You better get wise soon!”
“Iran can’t get its act together. They don’t know how to sign a nuclear weapons treaty. They’d better get wise soon!” said Trump. The post was accompanied by an AI-generated image of Trump holding a gun with explosions in the background and the words “NO MORE MR. NICE GUY!” accompanied.
Bill Perkins, chief investment officer at Skylar Capital Management, said oil markets are being driven by a mix of physical disruptions, geopolitics and investor psychology, with traders closely monitoring tanker movements and political signals as the U.S.-Iran conflict drags on.
“We are still a long way from an agreement and perhaps hostilities or a little more time are needed to open the Strait of Hormuz,” he said.
While strategic reserves and existing crude in transit have helped cushion oil prices, he described product markets as significantly tighter, citing the sharp rise in diesel prices and ongoing logistical bottlenecks even if a ceasefire is reached
Goldman has flagged emerging downside risks to demand, noting that global oil consumption in April could be about 3.6 million barrels per day below February levels, with weakness concentrated in jet fuel and petrochemical feedstocks.
Looking ahead, Perkins said oil prices could rise to $140 to $150 a barrel if disruptions continue, although increased prices would ultimately dampen demand.
— CNBC’s Holly Ellyatt contributed to this report.
