Oil hits new war high on report Trump to be briefed on potential Iran strikes

SINGAPORE – Oil prices hit a four-year high of above US$126 a barrel on April 30 following a report that the US military would brief President Donald Trump on potential action against Iran, after he signalled no let-up in the naval blockade of the country.

Brent crude, the global oil benchmark, soared as much as 7.1 per cent to US$126.41 a barrel, before paring gains to US$121.82, up 3.2 per cent, as at 4.30pm Singapore time.

The US benchmark, West Texas Intermediate, rose 1.2 per cent to US$108.14.

Mr Trump told Axios he would not lift a naval blockade until he secured a nuclear deal with Iran. The news site separately reported that the US Central Command would brief the President on April 30 on potential military plans.

The US is expanding its pressure on Tehran by seeking the forfeiture of two Iran-linked oil tankers that were seized by naval forces enforcing the blockade, as the American authorities try to squeeze buyers of Iranian crude. The US military has also asked for hypersonic missiles to be sent to the Middle East, which would mark the first time the country deployed those weapons.

The Strait of Hormuz has been effectively closed since the war started at the end of February, choking off flows of crude, natural gas and oil products, and driving up energy prices. On April 28, Mr Trump discussed steps the US could take to prolong its blockade while minimising the impact on American consumers at a meeting with oil and trading executives, the White House said.

Iranian officials remain defiant. Mr Mohsen Rezaee, military adviser to the Supreme Leader, vowed the nation would respond if the US blockade continued, according to state TV.

Parliament Speaker Mohammad Bagher Ghalibaf accused Mr Trump of seeking to force Tehran to surrender through economic pressure and internal divisions, Tasnim news agency reported.

Mr Robert Rennie, head of commodity research at Westpac Banking, said: “Trump has ripped away the security blanket the market was clinging to – the hope that the war was about to end.

“Traders are now being forced to confront a much uglier reality: Both sides still think they are winning, neither side has a clear incentive to negotiate, and energy prices are starting to accelerate higher.”

Blockades of the Strait of Hormuz by the US and Iran have reduced daily transits to near zero.

The International Energy Agency called the conflict in the Middle East the biggest supply shock in history, and Vitol Group said the market is facing a supply loss of around one billion barrels.

The US has turned away dozens of ships since the start of its blockade on April 13. Confiscating oil cargoes aboard Iran-linked tankers would represent an escalation of Mr Trump’s economic offensive – and dovetail with Washington’s strategy towards Venezuelan crude after the ouster of President Nicolas Maduro.

The Trump administration is now asking other countries to join an international coalition that would enable ships to navigate the Strait of Hormuz, according to a report from The Wall Street Journal. It cited an internal State Department cable sent to US embassies on April 28.

US crude exports surged to a record last week as global buyers tapped American producers to replace lost supply from the Middle East. Overseas shipments rose above six million barrels a day, eclipsing a previous high of nearly 5.3 million set in late 2023.

“It feels like a day of reckoning,” said Ms Rebecca Babin, a senior energy trader at CIBC Private Wealth Group, referring to the price gains on April 29.

“The paper market is catching up to the physical, which has already started to reflect tighter balances and delayed flows.” BLOOMBERG