Crude oil prices have surged to their highest point since 2022 after reports emerged that U.S. military leaders are preparing to brief President Donald Trump on new options for confronting Iran.
Axios revealed that U.S. Central Command has developed plans for quick, intense airstrikes against key Iranian targets, hoping to shatter the current stalemate in negotiations with Tehran.
Brent crude jumped almost 7 per cent to more than $126 per barrel, surpassing early highs from Russia’s invasion of Ukraine, according to data from Reuters and Bloomberg. This comes amid crumbling peace talks and the effective closure of the Strait of Hormuz, a vital artery carrying roughly 21 per cent of the world’s seaborne oil trade.
Unnamed officials told Axios the strikes would focus on infrastructure, while a parallel proposal calls for U.S. forces to seize sections of the strait and reopen it for commercial shipping, much like operations during the 1980s Iran-Iraq war.
West Texas Intermediate crude, the U.S. benchmark, climbed 2.3 per cent to about $109 per barrel, with the active July Brent contract up 2 per cent at around $113 in early Asian trading.
Futures contracts, which bind parties to buy or sell assets at future dates, have amplified traders’ wagers on further Gulf tensions. Yeow Hwee Chua, economics professor at Nanyang Technological University, noted that markets are hypersensitive here, as even a slight chance of escalation could produce “outsized implications” for global energy supplies.
The U.S. has promised to blockade Iranian ports until Tehran stops threatening Hormuz shipping. Iran responded to U.S.-Israeli airstrikes by vowing attacks on vessels in the strait. Prices rose 6 per cent on Wednesday following leaks about an “extended” U.S. blockade.
Energy executives met Trump on Tuesday to explore ways to protect American consumers, fuelling market anxiety over prolonged disruptions. Bloomberg highlights how 2019 attacks on Saudi facilities spiked prices 15 per cent overnight.
“The big question in my mind is how long the Trump administration can stand the economic heat,” Will Walker-Arnott, investment manager at Raymond James, told the BBC’s Today programme. “People are really beginning to worry about the inflationary impact coming through from the rise in the oil price,” he added.
Rystad Energy warns that combined with OPEC+ output curbs, lasting Hormuz issues could propel Brent past $150 and strain global growth.