Oil prices are rising as the war involving Iran enters its third week, with Donald Trump pressing global allies to help secure the strategic Strait of Hormuz while investors react to growing threats to Middle Eastern export facilities.
Prices jumped at the market open on Sunday as tensions across the region showed little sign of easing. Brent crude surged to a high of $106.5 per barrel, while West Texas Intermediate (WTI) climbed to $102.4. At the time of writing, the benchmarks were trading around $103 and $97.5 respectively.
The latest price spike followed US strikes on Kharg Island, Iran’s primary oil export hub, on Friday after markets closed. Although the operation targeted military infrastructure, the strike on the island responsible for roughly 90% of Iran’s oil exports, according to JPMorgan has intensified fears of disruption in the already volatile shipping corridor.
Officials in the Trump administration have also left open the possibility of targeting broader energy infrastructure in the region. Speaking in an interview with CNN on Sunday, US ambassador to the UN Mike Waltz said the president had “deliberately hit the military infrastructure only, for now.” He added that Trump could still choose to strike Iran’s energy facilities if tensions escalate further.
Securing the Strait of Hormuz
On Saturday, Trump increased pressure on European and Asian allies to join a naval escort mission through the Strait of Hormuz, a key shipping route for global oil supplies.
Posting on Truth Social, the US president called on countries including China, France, Japan, South Korea and the United Kingdom to contribute to the effort, arguing they would be more affected by supply disruptions than the United States.
While no firm commitments have been announced, the White House is expected to reveal as early as this week that several countries have agreed to participate in the escort mission, according to officials cited by The Wall Street Journal. Authorities are still debating whether the operation should begin during the conflict or only after hostilities subside.
Meanwhile, foreign ministers from the European Union are meeting in Brussels on Monday to discuss extending the bloc’s Aspides naval mission to cover the strait. However, key figures such as Johann Wadephul, Germany’s foreign minister, have already expressed scepticism about expanding the operation.
US “Loans” Strategic Oil Reserves
The United States Department of Energy has also outlined its contribution of 172 million barrels to what the International Energy Agency says will be the largest emergency oil stockpile release in history, totaling 400 million barrels.
Unlike previous releases, the Trump administration has structured the move as an “exchange” rather than a sale. Under the plan, the oil will effectively be loaned to the market, with the barrels expected to be returned later along with an additional premium.
The first tranche of the release will amount to 86 million barrels, with bids due by Tuesday. The IEA said reserves from Asia and Oceania would be available immediately, while shipments from Europe and the Americas are expected to arrive by the end of March.
The unfolding conflict and uncertainty around oil infrastructure in the Gulf have kept energy markets on edge, with analysts warning that any disruption to shipping through the Strait of Hormuz could have major consequences for global supply and prices.
