Oil prices surged to a multi-year high on Thursday following reports that the U.S. military will brief President Donald Trump on potential military action against Iran. According to Axios, U.S. Central Command is preparing to present plans for possible operations targeting Iran, contributing to the upward momentum in oil prices.
On June 4, 2023, an oil pumpjack was photographed on the outskirts of Almetyevsk in Russia’s Republic of Tatarstan. Brent crude futures reached a four-year peak on Thursday. The rally was driven by market concerns over a potential resurgence of armed conflict, compounded by the ongoing U.S. blockade of Iranian exports. Reports indicated that military officials intend to update President Trump on possible actions against Iran.
Citing two informed sources, Axios reported that U.S. Central Command plans to submit a proposal outlining potential military measures against Iran. This development follows earlier reports that President Trump rejected a proposal from Tehran to reopen the Strait of Hormuz, signaling that the maritime blockade will persist pending a broader nuclear agreement.
The international benchmark Brent crude briefly reached a wartime high of $126 per barrel before paring gains to $121.71, up 3.1% on the day. As of 4:33 a.m. ET, U.S. West Texas Intermediate (WTI) crude rose 1.3% to $108.17 per barrel. The gains extended a sustained uptrend for both Brent and WTI. Since the U.S.-Israel joint military action against Iran began on February 28, the two contracts have climbed approximately 60%.
Analysis of Oil Price Trends Warren Patterson, Head of Commodities Strategy at ING Groep NV, noted in a report: “The oil market has shifted from excessive optimism to confronting the reality of supply disruptions in the Persian Gulf.” He added: “The longer the disruptions persist, the harder it becomes for the market to rely on inventory buffers, increasing the need for demand destruction. Raising oil prices remains the only way to achieve this balance.”
Goldman Sachs estimates that oil exports through the critical Strait of Hormuz have fallen to just 4% of normal levels. Stalled U.S.-Iran negotiations and tightening U.S. sanctions are further straining supplies. Analysts at the firm warned that prolonged disruptions, combined with limited Iranian exports and insufficient global storage capacity, could worsen the supply shortfall. Although the UAE’s increased production following its exit from OPEC may help in the medium term, it is unlikely to alleviate near-term tightness.
Trump Issues Fresh Threat to Iran On Wednesday, President Trump posted on Truth Social, openly threatening Iran and urging the country to “get smart soon!” He wrote: “Iran is a mess and doesn’t know how to make a good nuclear deal. They better get smart soon!” The post was accompanied by an AI-generated image showing Trump holding a gun against an explosive backdrop, captioned: “No more Mr. Nice Guy!”
Market Outlook Bill Perkins, Chief Investment Officer at Skylar Capital Management, stated that current oil prices are being driven by a combination of actual supply disruptions, geopolitical risks, and investor sentiment. As U.S.-Iran tensions continue, traders are closely tracking tanker movements and political signals. He commented: “There remains a gap between the two sides. It may take more conflict or time before the Strait of Hormuz reopens.”
Although strategic reserves and oil in transit have temporarily cushioned prices, Perkins highlighted that refined product markets are under significant pressure. Even if a ceasefire occurs, diesel prices have risen sharply, and logistical bottlenecks persist. Goldman Sachs has warned of downside risks to demand: global oil consumption in April may fall by approximately 3.6 million barrels per day compared to February, with particular weakness in jet fuel and petrochemical feedstock demand.
Looking ahead, Perkins expects that if supply disruptions continue, oil prices could surge to $140–150 per barrel. However, sustained high prices would eventually curb demand.