Oil prices rise as Trump threats escalate before deadline
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Brent crude, the global oil benchmark, climbed 1.4 per cent to US$111.31 a barrel, after adding 0.7 per cent the previous day.
PHOTO: AFP
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Singapore – Oil rose a third day as US President Donald Trump escalated threats to obliterate key Iranian infrastructure if his terms are not met before an April 7 deadline.
Brent crude, the global oil benchmark, climbed 1.4 per cent to US$111.31 a barrel, after adding 0.7 per cent the previous day. The US benchmark, West Texas Intermediate (WTI), surged 2.4 per cent to US$115.10 after closing at its highest since June 2022.
Mr Trump said on April 6 that talks with Iran are “going well”, even as he listed reopening the Strait of Hormuz as “a very big priority”.
The US President laid bare the consequences Iran would face if it does not reach a deal by his 8pm Eastern Time cut-off, saying the US military could destroy “every bridge in Iran by 12 o’clock tomorrow night”. Power plants would be rendered “burning, exploding and never to be used again”, he said, which would be a breach of the Geneva Conventions.
The deadline is 8am on April 8 in Singapore time.
Iran has warned that it would respond to such strikes by ramping up its own attacks on energy infrastructure in the Persian Gulf – a move that could heighten the global fuel squeeze and amplify damage to the world economy. The war – which is now in its sixth week – has roiled crude markets, triggering a severe supply shock.
“If Trump does move into ‘decimation’ mode and Iran follows through with ‘more crushing’ and ‘more extensive’ retaliatory attacks, we expect to see momentum building above US$110, toward US$120,” said Robert Rennie, head of commodity research at Westpac Banking Corp. “However, if Trump extends, again, then we remain in the current US$95-US$110 range for now.”
As the war grinds on, there are signs of deepening concern about near-term supply. WTI’s prompt spread – the difference between its two nearest contracts – at one point traded near US$15.50 a barrel on April 6, near the biggest premium on record. The widening was ushered in by firming expectations of tighter US supplies as overseas buyers rush to purchase American crude. BLOOMBERG
