Oil prices closed higher on Monday after the current president of the United States, Donald Trump, promised a response against Iran over the death of three American service members. The escalation of tensions in the Middle East increased market concern over possible disruptions to the global supply of the commodity.
Brent crude, the international benchmark, rose 1.3% and closed at US$ 89,22 per barrel. Meanwhile, WTI, the United States benchmark, climbed 0.9%, ending the day at US$ 83,23 per barrel. For the month to date, both are posting gains close to 20%.
In a post on Truth Social, Trump said:
“Every time Iran kills an American soldier, it will pay for that death many times over!”, Trump said. “This directive has been passed on to the Secretary of War, Pete Hegseth, to the Chairman of the Joint Chiefs of Staff, Daniel Caine, and to all military leaders.”
Brent briefly rose above US$ 90 overnight, following confirmation of the deaths of the American service members. Later, part of the gains was pared after the spokesperson for Iran’s Ministry of Foreign Affairs, Esmail Baghaei, signaled that Tehran accepts negotiating with Washington if its interests are respected.
Pressure on the market also increased after the Houthis, an Iran-backed group in Yemen, announced a maritime embargo against Saudi Arabia. The measure increases risks for oil transport in the region and reinforces concerns over routes near the Strait of Hormuz and Bab el-Mandeb.
In recent days, the United States intensified attacks against Iranian targets, while Tehran responded with new missiles against Washington’s allies in the Middle East. At the same time, an oil tanker was hit by a projectile and set on fire, according to British maritime authorities, increasing fears over shipping security.
The rise in oil prices is already beginning to affect fuels. In the United States, gasoline returned to the level of US$ 4 per gallon.
According to Amrita Sen, founder of Energy Aspects, a sharper reduction in the flow of ships through the Strait of Hormuz, combined with falling global inventories, could push oil above US$ 100 per barrel.