Oil Rises as Trump Says Iran Blockade Could Last ‘Months’
Oil prices climbed Thursday as escalating tensions and a prolonged deadlock between the US and Iran fueled expectations of continued supply disruptions and tighter global markets.
After a slight easing from late evening highs, US West Texas Intermediate crude oil futures for June delivery reached as high as $105.04 per barrel, up $5.11 or about 5.11% from the settlement the previous day.
Brent crude oil futures for June delivery saw a high of $117.15 per barrel, up $5.89 or 5.29% from the settlement in the previous session.
US President Donald Trump is set to receive a briefing on new plans for potential military action in Iran on Thursday from CENTCOM Commander Adm. Brad Cooper, Axios reported Thursday, citing sources.
According to the report, the briefing signals that Trump is seriously weighing a return to large-scale combat operations, either to break the stalemate in negotiations or to deliver a final blow before ending the war.
CENTCOM has devised a plan for a “short and intense” series of strikes on Iran, likely targeting infrastructure, according to the report, in an effort to overcome the negotiating impasse.
The expectation is that such action would push Iran to come back to the negotiating table with greater flexibility on the nuclear issue.
Another proposal expected to be presented to Trump focuses on seizing control of part of the Strait of Hormuz to reopen it for commercial shipping, but such an operation could include ground forces, the report said.
A further option previously discussed, and possibly to be raised again, is a special forces mission to secure Iran’s stockpile of highly enriched uranium.
Trump told Axios on Wednesday that he views a naval blockade of Iran as “somewhat more effective than bombing.”
The report suggested that Trump sees the blockade as his main leverage, though he remains open to military action if Iran does not yield.
US military planners are also preparing for the possibility that Iran could retaliate against American forces in the region in response to a blockade.
According to the report, Joint Chiefs Chairman Gen. Dan Caine is expected to attend Thursday’s briefing as well.
After Pakistan-mediated talks held during a ceasefire that took effect on April 8 failed to yield an agreement, the US president on April 13 ordered a naval blockade of Iran, with US forces intercepting vessels linked to Iranian ports in and around the Strait of Hormuz.
A senior Iranian security official, speaking on condition of anonymity, told Iran’s state-run Press TV that the military would respond soon to the US naval blockade with an “unprecedented action.”
Meanwhile, the US commercial crude oil inventories fell by 1.3% in the week ending April 24, according to data released by the Energy Information Administration (EIA) on late Wednesday.
Inventories declined by 6.2 million barrels to around 459.5 million barrels, while market expectations had pointed to a decrease of 300,000 barrels.
A surge in US crude exports amid supply disruptions linked to the Iran conflict helped drive a sharp draw in inventories, briefly making the country a net crude exporter on a weekly basis for the first time in decades.
Strategic petroleum reserves, which are excluded from commercial crude stocks, fell by 7.1 million barrels to 397.9 million barrels, according to the data.
Trump told oil executives this week that the US would “continue the current blockade for months if needed,” according to a White House official.
US officials hope the blockade will force Iran to cap its oil wells and shut down production once its oil facilities, such as Kharg Island, are filled to the brim.
“The blockade is somewhat more effective than the bombing,” Trump told Axios. “They are choking like a stuffed pig.” Bitcoin Price Declines as U.S. Fed Keeps Rates Steady
