Oil price surges as US president Trump demands Iran’s “unconditional surrender”

Oil futures jumped fast on Tuesday after Donald Trump went online and fired a direct threat at Iran’s Supreme Leader. West Texas Intermediate (WTI) surged more than 2.5% to hit $73.6 per barrel, reaching its highest price in five months.

Traders reacted instantly to Trump’s call for “UNCONDITIONAL SURRENDER” from Tehran and his warning that Ayatollah Ali Khamenei was now an “easy target.”

The post came during rising Middle East tension after five straight days of back-and-forth attacks between Israel and Iran. Trump’s post read, “We know exactly where the so-called ‘Supreme Leader’ is hiding. He is an easy target, but is safe there – We are not going to take him out (kill!), at least not for now.”

He also added that US patience was running low and made it clear he didn’t want any more missiles aimed at American troops or civilians.

Trump rejects Israel’s strike plan, then escalates anyway

Trump’s “easy target” threat landed just 48 hours after reports came out that he blocked an Israeli plan to assassinate Khamenei. He didn’t deny that part. But what he did do was crank the heat even higher. After saying the US has “total control” over Iran’s airspace, he pushed the conflict closer to military intervention by flat-out demanding Iran give up completely.

Israeli Prime Minister Benjamin Netanyahu on Monday tried to cool down talk of a fallout with Trump over the blocked operation. “I wouldn’t rush to conclusions,” he said, brushing it off. But the timing was clear — Israel’s attack on Friday hit Iranian military and nuclear sites and kicked off a missile exchange that’s still ongoing. That strike, while tagged as “preemptive,” launched five full days of warfare.

The Pentagon is now sending more US warships into the region. NBC News confirmed on Tuesday that another aircraft carrier is on the way. Earlier deployments had already helped Israel intercept missiles and drone projectiles. Now, the US military’s presence is growing again, and fast.

Trump scheduled a Situation Room meeting for later Tuesday with his top national security advisors. It’s meant to review the Israel-Iran situation, but the messaging from the president suggests a shift. His public posts, this time, went way beyond just supporting Israel. He now seems open to more direct American involvement in the fight.

Strait of Hormuz traffic drops as tankers dodge crossfire

The shipping world didn’t take long to respond. Some oil tankers and cargo ships are already avoiding the Strait of Hormuz, according to the largest shipping group in the world. This narrow stretch of water connects the Persian Gulf to the Arabian Sea, and it’s one of the most important routes in the oil industry.

In 2023, daily oil traffic through the strait averaged 20.9 million barrels, making up 20% of all petroleum liquids consumed globally. Now, thanks to the rockets flying over the Middle East, that key passage is looking riskier by the hour.

Shipowners are steering clear of it and also the Red Sea, especially after Iran threatened to close off traffic. Dubai’s massive Jebel Ali Port, one of the region’s biggest container hubs, is also being impacted. These ports move goods across South Asia, East Africa, and other parts of the Persian Gulf using feeder networks.

Israel’s surprise Friday airstrike on Iran’s military assets was followed by four days of rocket fire between the two countries. The shipping industry saw that and hit pause. More cautious behavior followed instantly, with logistics companies watching the map closely. Delays are expected. Higher oil prices are only one part of the damage.

Wall Street felt it too. The S&P 500 dropped 0.8% Tuesday as the markets tracked the fallout. The Dow Jones lost 325 points, and the Nasdaq fell by 1%. Investors were hit with a double whammy: conflict headlines and weak US retail sales numbers. The fear was real — that the Middle East fight could stretch, drag in more players, and hit energy flows.

Prices for Brent crude and WTI both jumped over 3% Tuesday, wiping out losses from Monday. Traders had thought Iran was looking for a truce, but Trump’s post flipped the script. With oil chokepoints under pressure and ships dodging missiles, the idea of calm faded fast.

The oil market knows the Strait of Hormuz isn’t just a transit zone for fuel. It’s also a huge deal for global freight. The region’s top ports — like Jebel Ali and Khor Fakkan — are transshipment points. These facilities pass goods along global chains and feed nearby markets. If tensions stay high, the cost of moving cargo through these routes will go up too.

Right now, any disruption to oil shipments through Hormuz means instant price jumps. It also creates delays in supply chains, spikes insurance rates, and leaves a cloud of uncertainty over the region.

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