Oil futures jumped rapidly on Tuesday after Donald Trump connected online and issued a direct threat to Iran's Supreme Leader. West Texas Intermediate (WTI) rose more than 2.5% to reach $73.6 per barrel, hitting its highest price in five months.
Traders reacted instantly to Trump's call for the 'UNCONDITIONAL SURRENDER' of Tehran and his warning that Ayatollah Ali Khamenei was now an 'easy target.'
The post came amid rising tensions in the Middle East after five consecutive days of attacks between Israel and Iran. Trump's post stated: 'We know exactly where the so-called 'Supreme Leader' is hiding. He is an easy target, but he is safe there – We are not going to eliminate (kill!) him, at least not for now.'
He also added that U.S. patience was running out and made it clear he did not want any more missiles aimed at U.S. troops or civilians.
Trump rejects Israel's attack plan, but then escalates anyway.
Trump's 'easy target' threat came just 48 hours after it was reported that he blocked an Israeli plan to assassinate Khamenei. He did not deny that part. But what he did was further escalate tensions. After saying that the U.S. has 'total control' over Iranian airspace, he brought the conflict closer to military intervention by demanding that Iran completely surrender.
Israeli Prime Minister Benjamin Netanyahu attempted on Monday to calm talks of a possible rift with Trump over the blocked operation. 'I wouldn’t rush to conclusions,' he said, downplaying it. But the timing was clear: Israel's attack on Friday hit Iranian military and nuclear sites and initiated a missile exchange that is still ongoing. That attack, though labeled 'preventive,' launched five full days of war.
The Pentagon is sending more U.S. warships to the region. NBC News confirmed on Tuesday that another aircraft carrier is on its way. Previous deployments had already helped Israel intercept missiles and drone projectiles. Now, U.S. military presence is growing again, and quickly.
Trump scheduled a meeting in the Situation Room for later on Tuesday with his top national security advisors. It is intended to review the Israel-Iran situation, but the president's message suggests a shift. His public posts this time went far beyond just supporting Israel. He now seems open to greater direct U.S. involvement in the fight.
Traffic in the Strait of Hormuz decreases as tankers avoid the crossfire.
The transportation world did not take long to respond. Some tankers and cargo ships are already avoiding the Strait of Hormuz, according to the world's largest transport group. This narrow stretch of water connects the Persian Gulf with the Arabian Sea and is one of the most important routes in the oil industry.
In 2023, daily oil traffic through the strait averaged 20.9 million barrels, accounting for 20% of all oil liquids consumed worldwide. Now, thanks to rockets flying over the Middle East, that key passage looks riskier by the hour.
Boat owners are staying away from it and also from the Red Sea, especially after Iran threatened to close traffic. Dubai's massive Jebel Ali Port, one of the largest container hubs in the region, is also being affected. These ports move goods across South Asia, East Africa, and other parts of the Persian Gulf using feeder networks.
Israel's surprise airstrike on Friday on Iranian military assets was followed by four days of rocket fire between the two countries. The transportation industry saw it and hit the pause button. A more cautious behavior followed instantly, with logistics companies closely watching the map. Delays are expected. Higher oil prices are just part of the damage.
Wall Street felt it too. The S&P 500 fell 0.8% on Tuesday as markets followed the repercussions. The Dow Jones lost 325 points, and the Nasdaq dropped 1%. Investors were hit by a double whammy: conflict headlines and weak retail sales numbers in the U.S. The fear was real: that the fight in the Middle East could spill over, dragging in more players and affecting energy flows.
Brent and WTI crude prices rose more than 3% on Tuesday, erasing Monday's losses. Traders thought Iran was seeking a truce, but Trump's post changed the script. With oil choke points under pressure and ships dodging missiles, the idea of calm quickly faded.
The oil market knows that the Strait of Hormuz is not just a transit zone for fuel. It is also a big business for global shipping. Major ports in the region, such as Jebel Ali and Khor Fakkan, are transshipment points. These facilities pass goods along global chains and feed nearby markets. If tensions remain high, the cost of moving cargo through these routes will also increase.
At this moment, any disruption in oil shipments through Hormuz means instant jumps in prices. It also creates delays in supply chains, raises insurance rates, and leaves a cloud of uncertainty over the region.
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