Oil prices jump over 7% after Trump says attacks on Iran will continue

Oil prices jump over 7% after Trump says attacks on Iran will continue

LONDON, April 2 (Reuters) – Oil prices climbed nearly 7% on ‌Thursday after President Donald Trump said the U.S. would continue attacks on Iran, stoking fears of prolonged disruptions to oil supply.

Brent crude futures were up $8.34, or 8.2%, to $109.50 per barrel at 1139 GMT. U.S. West Texas Intermediate crude futures were up $9.23, ​or 9.2%, at $109.35 per barrel, touching their highest since March 9.

Both benchmarks were heading for the ​biggest daily gains, in both absolute and percentage terms, in three weeks, though they ⁠remained below highs above $119 a barrel touched earlier in the conflict.

“We’re going to hit them extremely ​hard over the next two to three weeks,” Trump said. “We’re going to bring them back to the Stone ​Ages where they belong.”

He gave no details on any steps that could lead to a reopening of the Strait of Hormuz.

Markets are reacting to the absence of any “clear mention of ceasefire or diplomatic engagement” in the speech, said Priyanka Sachdeva, senior ​market analyst at Phillip Nova.

“If tensions intensify or maritime risks increase, oil could test fresh highs as ​markets price in potential supply disruptions.”

BRITAIN HOSTS TALKS ON REOPENING HORMUZ

Britain is hosting a virtual meeting of 35 countries to ‌discuss options ⁠for reopening Hormuz. The United States is not due to attend.

On Wednesday, an oil tanker leased to QatarEnergy was hit by an Iranian cruise missile in Qatari waters, Qatar’s defence ministry said.

Some market participants said they had stopped dealing with cargoes priced off the Dubai Middle East benchmark, normally used to value nearly a fifth ​of global crude supply, because ​ports inside the ⁠Strait of Hormuz cannot be used.

OPEC+, meanwhile, is likely to weigh a further oil output increase on Sunday, sources said, a move that would position members to ​add more barrels should the Strait of Hormuz reopen but is not likely ​to meaningfully ⁠increase supply before then.

In Russia, Ukraine’s strikes on port infrastructure, pipelines and refineries have reduced export capability by 1 million barrels per day, or a fifth of total capacity, sources says, enough to set the stage for imminent ⁠production cuts.

The ​head of the International Energy Agency also warned that supply ​disruptions would start to affect Europe’s economy in April, after the region had previously been shielded by cargoes contracted before the start of ​the war.

Writes about the intersection of corporate oil and climate policy. Has reported on politics, economics, migration, nuclear diplomacy and business from Cairo, Vienna and elsewhere.