Strait of Hormuz showdown: Iran threat drives oil prices higher after Trump ultimatum

International

OIL prices surged further as tensions between the United States (US) and Iran escalated, threatening global oil supply and raising concerns over prolonged market instability.

A report by BBC stated that Brent crude, the global benchmark, climbed by 1.69% to $114.09 per barrel, while US crude rose by 2% to $100.29 at the opening of trading. Analysts from Goldman Sachs warned that elevated oil prices could persist through 2027 if the situation continues.

The increase follows an ultimatum issued by former US President Donald Trump, who warned that the United States would “obliterate” Iran’s power plants if the Strait of Hormuz is not reopened by Monday evening.

In response, Iran threatened to shut down the Strait indefinitely and

said it would not reopen the key oil route until any destroyed infrastructure is rebuilt. Iranian officials also warned of possible attacks targeting US and Israeli energy and communications infrastructure in the region.

The conflict, now in its fourth week, has already disrupted global oil shipments due to the effective closure of the Strait of Hormuz, considered the world’s busiest oil-shipping channel. The continued uncertainty is driving volatility in energy markets and raising fears of supply shortages.

Rising oil prices are also pushing fuel costs higher. In the United States, the average gasoline price reached $3.94 per gallon, up by nearly a dollar since the start of the conflict. Analysts said prices could reach $4 per gallon in the coming days.

Patrick De Haan, head of petroleum analysis at GasBuddy, said recovery in fuel prices may be slow even after the conflict ends, citing the time needed for global markets to stabilize.

“It’s going to be a snail’s pace for as long as this continues to stretch out, because it will take much more time for markets to globally mend,” he said.

US Treasury Secretary Scott Bessent said Americans may accept “temporary elevated prices” if it leads to long-term peace in the Middle East.

Financial markets also reacted to the developments, with major US stock futures declining at the opening of trading. Dow futures dropped by 0.6% or 237 points, while S&P 500 futures also fell by 0.6%, and Nasdaq futures declined by 0.8%. The developments highlight growing global uncertainty as geopolitical tensions continue to affect both energy supply and economic stability. (Samantha Faye Alcoma, CTU-TC BAEL-ELSD Intern)