Oil Prices Surge After Trump Escalates Iran Warning
Oil prices rallied to session highs on Monday after Donald Trump warned that Iran “could be taken out” as early as Tuesday night. His remarks followed reports that Tehran had rejected a new ceasefire proposal aimed at ending the conflict with the U.S. and Israel.
Brent and WTI Extend Strong Gains
At 13:31 ET (17:31 GMT), Brent crude futures were up 1.2% at $110.42 per barrel, after reaching a session high of $111.68. Meanwhile, WTI crude oil futures gained 1.4% to $113.07 per barrel.
WTI had already surged more than 11% in the previous full trading session ahead of the Good Friday holiday, highlighting strong bullish momentum in energy markets.
Iran Rejects Ceasefire Proposal
Reports indicate that both the U.S. and Iran received a ceasefire framework designed to halt hostilities. The proposal, reportedly mediated by Pakistan, included an immediate ceasefire followed by negotiations toward a broader agreement within 15 to 20 days.
However, Iranian state media confirmed that Tehran rejected the proposal, instead calling for a permanent end to the war. The response reportedly included a 10-point plan, covering issues such as sanctions relief and secure passage through the Strait of Hormuz.
Strait of Hormuz at the Center of Tensions
The Strait of Hormuz remains a critical flashpoint in the conflict. Trump has set a Tuesday deadline for Iran to reopen the waterway, which handles roughly 20% of global oil shipments.
Failure to comply could trigger military action, with Trump warning that key infrastructure, including power plants and bridges, may become targets if tanker traffic is not restored.
Trump Intensifies Rhetoric and Strategic Pressure
Speaking at a White House event, Trump acknowledged that Iran had made a “significant” proposal, but emphasized it was “not good enough.” He reiterated that decisive action could be taken rapidly if negotiations fail.
Trump also suggested that the U.S. could potentially take control of Iran’s oil resources, further escalating geopolitical tensions.
OPEC+ Output Increase Seen as Limited
Meanwhile, the OPEC+ announced plans to increase production by 206,000 barrels per day in May across eight member countries.
However, traders largely dismissed the move as having limited immediate impact, citing logistical constraints that could delay the additional supply from reaching global markets.
Rising Oil Prices Fuel Inflation Concerns
The sharp rise in oil prices has reignited concerns about global inflation. Higher energy costs are expected to increase pressure on transportation, manufacturing, and consumer sectors worldwide, particularly if disruptions in the Strait of Hormuz persist.
