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MarketsAI Desk•2 views

Oil Prices Surge on Iran War Escalation Fears

Oil prices surged over 7% on Thursday due to escalating fears of the U.S.-Iran war, sparked by President Trump's threats and Iran's retaliatory warnings. Global stock markets declined, with South Korea's Kospi falling 4.5%. Trump announced plans for a strong strike on Iran within weeks while claiming the war is near its end, and threatened to bomb Iranian power plants. Iran vowed extensive retaliation. Concerns over potential disruptions in the Strait of Hormuz, a critical oil shipping route, added to market volatility. The conflict continues with missile attacks and warnings of further violence in the region.

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Oil Prices Surge on Iran War Escalation Fears

Oil prices surged and global stocks fell on Thursday following inflammatory statements from President Donald Trump and Iranian officials, heightening fears of a significant escalation in the U.S.-Iran conflict.

Market Reaction

  • Brent crude rose 7.4% to over $108 per barrel.
  • WTI increased 7% to $107 per barrel.
  • South Korea's Kospi index dropped 4.5%, leading losses in Asia.
  • European markets saw sharp declines, and U.S. futures pointed to a lower open.

Trump's Warnings

  • Trump stated the war with Iran is "close to ending" but also threatened to strike Iran "with much force in the next two or three weeks."
  • He reiterated threats to bomb Iran's power plants if demands aren't met.
  • Trump said the U.S. does not rely on oil from the Strait of Hormuz and expects the strait to open naturally after the conflict.
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Iran's Retaliation Threat

  • Iran threatened "more extensive and destructive actions" in response.
  • Analysts note that while the U.S. is less exposed to supply disruptions, global oil prices affect all markets.

Strait of Hormuz Concerns

  • Analysts warn that even after hostilities cease, shipping through the strait may take weeks to return to normal levels.
  • Claudio Galimberti of Rystad noted resumption depends on security guarantees and insurance coverage.

Ongoing Middle East Conflict

  • Iran launched missiles at Israel early Thursday.
  • UAE intercepted a missile near an industrial center.
  • U.S. embassy in Iraq warned of potential attacks by Iran-linked militants in Baghdad within 24-48 hours.
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