Crude oil prices surged Monday night following an incendiary post by President Donald Trump, warning of imminent danger in Iran’s capital and renewing his vow to prevent the country from acquiring nuclear weapons.
The post marked a significant escalation in U.S. rhetoric, deepening concerns that the ongoing Israel-Iran confrontation could spiral into a full-blown regional crisis with dire implications for global energy markets.
“IRAN CAN NOT HAVE A NUCLEAR WEAPON. I said it over and over again! Everyone should immediately evacuate Tehran!” Trump posted on Truth Social, the platform owned by his media company.
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Within minutes of the post, oil markets reacted sharply. U.S. West Texas Intermediate (WTI) futures jumped as much as 2.7%, before stabilizing at $72.05 a barrel, while Brent crude, the international benchmark, surged 2.2% before settling 0.4% higher at $73.50. The sharp movement reflects deep market anxiety over the possibility of military escalation in one of the world’s most volatile and energy-critical regions.
Global Markets Rattle as Tensions Rise
The reaction extended beyond oil. U.S. equity futures dropped, signaling investor concern that further escalation could destabilize global markets:
- S&P 500 futures were down 0.4%
- Dow futures slipped 0.4%
- Nasdaq futures fell 0.5%
Financial analysts said the president’s post added fuel to a fire already burning. Israel has continued its campaign of airstrikes on Iranian military targets in recent weeks, and Tehran has warned that it will respond decisively to any threat against its sovereignty.
“Trump’s comments inject even more uncertainty, risk, and volatility into the market,” said Vishnu Varathan, head of macro research for Asia (ex-Japan) at Mizuho Bank. He noted that the statement could be interpreted as either a calculated warning to deter Iran or the opening salvo of a broader escalation.
The most immediate market concern remains the Strait of Hormuz, the narrow maritime chokepoint between the Persian Gulf and the Arabian Sea. Roughly 20% of the world’s oil passes through this strait. Iran has long threatened to close it in retaliation to any perceived aggression from the U.S. or its allies.
As global oil markets head into the peak summer demand season, even the slightest disruption through the Strait could cause a dramatic spike in prices and lead to global energy shortages.
“A blockade remains the key risk that could push markets into uncharted territory,” said Janiv Shah, vice president of oil markets at Rystad Energy, indicating that even if the probability of a blockade is low, its potential impact is enormous. That’s why we’re seeing the market price in that risk.
The U.S. Navy maintains a strong presence in the region to ensure the strait remains open, but a direct confrontation with Iran would significantly raise the stakes — and likely trigger retaliatory moves by Iranian proxies across the region, including in Iraq, Syria, Lebanon, and Yemen.
Brinkmanship, Regime Survival, and the Shadow of 2019
This is not the first time oil markets have been shaken by brinkmanship involving Iran. In 2019, under Trump’s first administration, a similar standoff over Iran’s nuclear ambitions led to tanker seizures, drone shootdowns, and a spike in oil prices, though it ultimately stopped short of open warfare.
What makes the current situation more dangerous, according to Varathan, is the lack of viable diplomatic off-ramps. Trump’s renewed emphasis on Iran’s nuclear capabilities may corner Tehran into abandoning cautious survival strategies in favor of more aggressive posturing.
“If the leadership in Iran smells regime change on the agenda, the risk is that it may shift from loss-minimizing survival strategies to destruction-maximizing end-game,” Varathan warned.
As of Tuesday morning, there was no follow-up statement from the White House or the State Department clarifying the context of Trump’s warning or confirming the credibility of the threat to Tehran. Iran’s government, for its part, has remained defiant but cautious, indicating it will respond to any aggression “at a time and place of its choosing.”
Markets will be watching for movement on several fronts, including: Whether Israel intensifies its strikes or announces broader military objectives, any sign of Iranian retaliation or closure of shipping lanes, a formal U.S. military repositioning in the Gulf region and diplomatic efforts from regional powers like Saudi Arabia, the UAE, or Turkey to mediate or de-escalate tensions.
However, oil markets are expected to remain highly volatile, with prices sensitive to even the slightest development or signal from Washington, Tehran, or Tel Aviv.