Oil Prices Surge as Trump Threatens Iran Again: How High Can They Go?

TLDR

• Brent crude rose above $111 a barrel, with WTI approaching $108, marking a third straight day of gains
• Trump posted a warning on Truth Social saying Iran must act “FAST” or face destruction
• The US and Israel are reportedly preparing to potentially resume military strikes as early as next week
• Iraqi oil exports through the Strait of Hormuz fell to 10 million barrels in April, down from 93 million monthly
• A drone struck a UAE nuclear facility over the weekend, raising concerns about regional energy infrastructure

Oil prices climbed for a third consecutive day on Monday as President Donald Trump renewed his threats against Iran, warning that time was running out for a deal to reopen the Strait of Hormuz.

Brent crude rose above $111 a barrel after gaining nearly 8% last week. West Texas Intermediate moved toward $108.

US and Israel Said to Be Preparing for Possible Strikes

According to a report from The Times of Israel, the US and Israel are actively advancing military plans to potentially resume coordinated attacks on Iran as early as next week.

Trump met with his national security team at his Virginia golf club on Saturday. He is expected to meet again with Vice President JD Vance, White House envoy Steve Witkoff, Secretary of State Marco Rubio, and CIA Director John Ratcliffe in the Situation Room on Tuesday.

Hormuz Closure Continues to Squeeze Oil Supply

Oil has risen more than 50% since the US and Israel first attacked Iran in late February. The closure of the Strait of Hormuz has cut supply from Persian Gulf producers.

Iraqi oil exports through the strait fell to just 10 million barrels in April, down from a monthly baseline of 93 million barrels.

Morgan Stanley said last week that the market is in “a race against time,” warning that factors holding prices back could break down if the waterway stays closed into June.

Negotiations mediated by Pakistan and supported by China have stalled. Iran’s Mehr agency said Washington offered “no tangible concessions” while seeking concessions it failed to get during the war.

Iran’s Fars News reported the US presented five conditions to Tehran, including transfer of 400kg of highly enriched uranium to the US, limits to one active Iranian nuclear facility, and no release of frozen Iranian assets.

Weekend Drone Attack Raises Alarm

A drone struck an electrical generator outside the Barakah nuclear power plant in the UAE on Sunday, sparking a fire. The UAE said no injuries occurred and radiation safety was not affected.

The Trump administration also let a waiver for Russian crude sales lapse, adding further pressure on global supply despite a request from India to extend it.

US intelligence agencies are also investigating a suspected Iranian cyber attack that altered fuel gauge displays at gas stations across multiple US states, though no formal attribution has been made.

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