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MarketsAI Desk•1 views

Brent Crude Surges Past $116 on Trump's Iran Oil Remarks

Brent crude oil prices surged above $116 per barrel on Monday following U.S. President Donald Trump's remarks about seizing Iranian oil, specifically Kharg Island. This marks a more than 50% increase in March due to the U.S.-Israeli conflict with Iran, which has disrupted the critical Strait of Hormuz. Trump claimed progress in negotiations with Iran, though Iranian officials have expressed skepticism. Regional diplomatic efforts by foreign ministers from Pakistan, Saudi Arabia, Egypt, and Turkey aim to broker peace, while Houthi involvement threatens the Bab al-Mandab Strait. Experts warn that ongoing uncertainty could lead to further market volatility without a conflict resolution.

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Brent Crude Surges Past $116 on Trump's Iran Oil Remarks

Oil prices climbed sharply on Monday, with Brent crude exceeding $116 per barrel, as U.S. President Donald Trump's comments about seizing Iranian oil heightened fears of Middle East escalation.

Price Movement

  • Brent crude, the global benchmark, rose 3.5% to $116.5 a barrel.
  • WTI, the U.S. benchmark, increased 2% to $101.7 a barrel.
  • Prices have surged over 50% in March since the conflict began, with Brent settling at $112.57 on Friday, its highest since 2022.
  • Prior to the U.S.-Israeli attack on Iran on February 28, Brent traded around $73 a barrel.

Trump's Statements

  • In a Financial Times interview, Trump stated he wants to "take the oil in Iran" and could seize Kharg Island, which handles about 90% of Iran's oil exports.
  • He compared the potential move to U.S. operations in Venezuela, aiming to control the oil industry "indefinitely."
  • Trump also claimed on Air Force One that the U.S. is in "very good" negotiations with Iran, with Tehran agreeing to most of Washington's 15-point demands to end the war.
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Conflict Background

  • The U.S.-Israeli war against Iran started on February 28, prompting Iran to choke off the Strait of Hormuz, which normally carries around 20% of global oil supply.
  • This disruption has been a primary driver of the price surge.

Diplomatic Initiatives

  • Foreign ministers from Pakistan, Saudi Arabia, Egypt, and Turkey met on Sunday in a "very productive" session, according to Pakistan's FM Ishaq Dar.
  • Pakistan will facilitate talks between the U.S. and Iran in the "coming days."

Regional Risks

  • Iran-backed Houthi militants in Yemen joined the conflict over the weekend, launching strikes against Israel.
  • The Houthis could close the Bab al-Mandab Strait, a chokepoint linking the Red Sea to global shipping lanes.

Market Analysis

  • Jim Reid, head of global macroeconomic research at Deutsche Bank, noted in a Monday report: "There's still no sign of a clear end to the conflict, and given the various headlines, investors remain fearful about a fresh escalation."
  • The U.S. has deployed thousands of troops to the Middle East in the past week, adding to tensions.
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