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- Oil prices jumped after President Donald Trump’s speech offered no clear path to ending the Iran conflict.
- Trump’s remarks are raising fears of escalation and threats to oil infrastructure and oil flows.
- Oil prices have climbed sharply since the start of the war in Iran.
Crude oil futures jumped after President Donald Trump’s highly anticipated speech on the Iran war did not provide a firm timeline on when the conflict might end.
Benchmark Brent futures were 6.3% higher at $107.48 per barrel at 12:22 a.m. ET on Thursday. US West Texas Intermediate were 5.1% higher at $105.23 per barrel.
All three major US stock futures fell by more than 1%, signaling a shaky start for Wall Street.
Crude futures had settled lower earlier on Wednesday on hopes that Trump would claim victory in the conflict, but the American president did not commit to declaring an end to hostilities.
During his speech, Trump said the US was “on track to complete all of America’s military objectives” but added that “we are going to hit them extremely hard over the next two to three weeks.”
“We don’t have to be there. We don’t need their oil. We don’t need anything they have, but we’re there to help our allies,” Trump said.
“We’re going to bring them back to the Stone Ages where they belong,” he said.
Concerns resurfaced over prolonged disruptions to supply through the Strait of Hormuz — a critical global oil chokepoint — where traffic has plunged.
Trump suggested other countries should “take the lead in protecting the oil that they so desperately depend on” and that the passage would “open up naturally” after the war.
‘Much more hawkish’ than expected
Trump’s comments were “much more hawkish” than what markets had been expecting over the past two days, wrote Dan Pickering, the chief investment officer at Pickering Energy Partners, on X.
Pickering added that if the bombing continues for another two to three weeks, any return to normalcy could take months. Meanwhile, “the oil market tightens every single day,” he added.
Trump also threatened further escalation, saying the US could expand strikes to additional targets if Iran does not agree to a deal, including potentially hitting critical infrastructure like power plants.
“We have not hit their oil, even though that’s the easiest target of all, because it would not give them even a small chance of survival or rebuilding,” Trump said.
Trump offered “absolutely nothing new” and provided no clarity on when the war might end in his address, Vandana Hari, founder of energy consultancy Vandana Insights, wrote on X.
Instead, he is signaling that “Iran better make a deal or the US will mount a bigger military campaign, won’t spare oil infrastructure,” she wrote.
Still, some analysts said the outlook may not be as negative as the market’s knee-jerk reaction suggested.
“President Trump’s address anchors expectations toward a relatively rapid de-escalation, with a stated timeline of weeks rather than months,” wrote Claudio Galimberti, the chief economist at Rystad Energy, in a note.
However, any reopening of flows through the Strait of Hormuz is not guaranteed and would depend on security assurances, insurance coverage, and restored operational confidence, he cautioned.
Financial markets are likely to move first, gradually pricing in an expected resolution and easing risk premiums, while physical oil markets will likely take longer to catch up, Galimberti added.
He said Trump’s comments reflect a “characteristic ambiguity” that leaves multiple military options on the table in the near term, even as they point to a relatively short timeline for US involvement.
“Until there is greater clarity on the path to de-escalation, markets are likely to remain highly volatile,” Galimberti wrote.