Trump Promises Weeks More Iran Strikes — Oil Prices Explode to New Highs
Brent front-month futures closed at $108.98 and WTI at $112.43 per Yahoo Finance as of 02 April 2026 13:05 UTC, surging sharply at the US market open after President Trump delivered a combative address vowing to hit Iran "extremely hard over the next two to three weeks" — a direct reversal of the de-escalation signal covered in our previous brief. WTI's climb above $112 is particularly striking, with WTI now trading at a premium to Brent — per AP News, US crude rose $10.11 to $110.24 as of 02 April 12:38 UTC, reflecting intensified geopolitical risk pricing in domestic crude. The surge fully erases Wednesday's decline, when Brent briefly fell below $100 on hopes of imminent conflict resolution.
Trump's address offered no ceasefire timeline, threatened strikes on Iran's power plants and energy infrastructure, and — critically — stated that other nations "should take the lead" in reopening the Strait of Hormuz, walking back any US commitment to securing the chokepoint per Yahoo Finance. Iran responded by threatening "more extensive and destructive actions" per CNN. Separately, 35 countries convened a UK-led meeting to coordinate Strait reopening efforts, though UK Prime Minister Starmer acknowledged reopening "will not be easy," and the US declined to participate per Straight Arrow News - SAN.
On the supply side, the IEA characterised the disruption as the "biggest in history," with losses expected to double in April as pre-war cargoes are exhausted per Marine News Magazine. Iraq's southern oil production has collapsed by more than 70% due to the Strait closure per TelegraphHerald.com. Bank of America revised its forecasts, projecting oil prices will remain near $100 per barrel for the rest of 2026 even if the conflict winds down this month, describing the war as an "energy shock" per Yahoo Finance. Macquarie Group estimates a 20% probability — down from 40% late last week — that oil spikes above $200 per barrel if the war extends through June per CNN.
The price action at the US open delivers an unambiguous verdict: markets are re-pricing a prolonged conflict after Trump's address dismantled the de-escalation narrative that had briefly pushed Brent below $100 on Wednesday. The unusual inversion of WTI trading above Brent signals deepening US-specific supply anxiety, likely driven by Trump's threat to target Iranian energy infrastructure and the absence of any US commitment to reopen the Strait. Wednesday's dip below $100 now reads as a clean capitulation to a false signal — and today's sharp reversal was entirely predictable given Iran's explicit denial that any negotiations were taking place.
The forward risk profile has materially deteriorated since our last brief. Trump's statement that other nations should handle the Strait reopening strips out the one actor with sufficient leverage to force a swift resolution, extending the market's expected disruption horizon well beyond what was priced in as recently as Wednesday. The 35-nation diplomatic meeting is a notable development, but it carries no enforcement mechanism — and Starmer's own admission that reopening "will not be easy" signals a process measured in weeks or months, not days. With April IEA supply losses expected to double March's figures and Bank of America now projecting $100 oil as a full-year baseline, the structural bid under prices is meaningfully stronger today than it was 24 hours ago.