Oil prices rose on Tuesday after US President Donald Trump made ominous threats to Iran ahead of a deadline set this evening to reopen the Strait of Hormuz.
usa crude oil By 11:28 a.m. ET, oil prices had risen more than 3% to $116.22 a barrel. Brent crude oil futures (for June delivery), the international benchmark, were trading 0.81% higher at $110.66 per barrel.
“Tonight, an entire civilization will perish and never rise again,” President Trump said in a social media post. “I don’t want that to happen, but it probably will.”
“But now that there is a complete and total regime change and a different, wiser, less radicalized way of thinking is prevailing, maybe something revolutionary and wonderful will happen,” the president said. “who knows?”
“Tonight marks one of the most important moments in the long and complex history of our world,” President Trump said. “47 years of extortion, corruption and death are finally over. God bless the great people of Iran!”
Meanwhile, the United States attacked military targets on Iran’s Kharg Island overnight, a White House official told CNBC. Kharg is the center of Iran’s oil exports.
brent crude oil price
President Trump threatens power plants, bridges
President Trump on Monday reiterated his threat that the United States would destroy Iranian power plants and bridges if Tehran does not reopen the Strait of Hormuz by 8pm ET on Tuesday, while suggesting that Iranian leaders are in serious negotiations.
The closure of the narrow waterway linking the Persian Gulf and the Gulf of Oman has caused a supply shock, sending prices of crude oil, jet fuel, diesel and gasoline soaring since the war broke out on February 28.
“They have until tomorrow,” the president said. “We’ll see what happens next. All I can say is they’re negotiating, we’re in good faith and we’re going to figure it out. We have the cooperation of great countries who want to end this, because it affects their countries as well.”
Reuters reported that the United States and Iran are discussing a framework plan to end the five-week conflict, as Tehran pushes back against President Donald Trump’s pressure to quickly reopen the Strait of Hormuz, which would allow the energy artery to resume traffic.
According to Axios, Iran rejected the US ceasefire proposal and presented its own 10-point plan, which included a permanent end to hostilities in the region rather than a temporary ceasefire, a protocol for safe passage through the Strait of Hormuz, sanctions relief and rehabilitation.
However, the report says it remains unlikely that a ceasefire agreement will be reached by the deadline.
President Trump responded to the proposal by saying, “They… made an important proposal. It’s not enough, but they took a very important step. Let’s see what happens.”
Traffic trickles through
Ed Yardeni, president of Yardeni Research, said the outcome of the peace talks remains uncertain and investors are on edge, torn between pricing in an imminent end to the conflict and further escalation.
“There is no way to predict the outcome. We cannot rule out the possibility that Iran will give in. Or President Trump may explain that negotiations are progressing and extend the deadline again, otherwise the war will escalate,” Yardeni said. “The fog of war remains thick.”
Shipping in the Strait of Hormuz is gradually resuming, with eight tankers sailing on Monday, up from an average of less than two a day in March, according to S&P Global Market Intelligence. But this is only a fraction of pre-war levels, with an average of 20 million barrels of oil and products passing through the Strait per day in 2025.
“This is a marginal improvement in terms of financial flows out of the[Strait of Hormuz],” said Michael Wang, senior currency analyst at MUFG Research, adding that the path to peace remains “narrow and unlikely” given the wide disparity in expectations between the parties to the conflict.
Even if strait traffic is fully reopened, Wang said it will still be some time before actual supplies reach Asian countries facing dire energy shortages, predicting the timeline to be “at least three to six months.”
