Despite U.S. President Donald Trump escalating threats against Iran, warning that the country's critical infrastructure would be destroyed if no deal is reached by Tuesday's deadline, international oil prices have stabilized near recent highs. This reflects a market cautiously awaiting a final resolution to the situation. On Tuesday, Brent crude held near $110 per barrel after gaining 0.7% in the previous session, while WTI crude fluctuated around $113 after hitting its highest closing price since June 2022.
Trump stated on Monday that negotiations with Iran were "progressing well," while also identifying the reopening of the Strait of Hormuz as a "very important priority." He made it clear that Iran would face severe consequences if it failed to reach an agreement by 8 p.m. Eastern Time on Tuesday. Trump claimed U.S. forces could "destroy all bridges in Iran by tomorrow night at 12 o'clock." He added that power plants would be "burned, exploded, and never usable again," actions which would violate the Geneva Conventions.
As Trump's threats intensified, the WTI crude futures spread widened. Iran has warned that it would escalate attacks on energy infrastructure in the Persian Gulf if subjected to such an assault—a move that could worsen global fuel supply tightness and further damage the world economy. The six-week-long conflict has disrupted crude markets, causing a significant supply shock.
Enverus oil and gas analyst Carl Larry commented, "There are no signs of de-escalation in the Iran situation. We might be approaching a turning point, but if it culminates in military action, that likely isn't the best outcome." As the conflict continues, concerns over near-term oil supplies are growing. On Monday, the prompt spread for WTI crude—the difference between the two nearest contracts—briefly approached $15.50 per barrel, nearing a record-high premium. The widening spread is driven by overseas buyers scrambling for U.S. crude and increasing expectations of tightening U.S. supply.
At the time of writing, Brent crude futures for June delivery were down 0.15% at $109.52 per barrel, while WTI crude futures for May delivery were up 0.54% at $113.02.
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