Oil prices surged to a six-month high Thursday as President Donald Trump indicated a decision on potential military strikes against Iran is imminent, with a ten-day window for a diplomatic resolution expiring rapidly. Benchmark U.S. Crude rose 2.6% to $66.71 a barrel, marking a 16% increase since the beginning of the year, according to market reports.
The President’s statement, delivered at the inaugural meeting of his “Board of Peace,” stipulated that Iran has ten days to reach an agreement regarding its nuclear program, warning of “bad things” should a deal not materialize. “Maybe we’re going to make a deal,” he said, adding that developments would be apparent “over the next probably 10 days.”
The potential for military action has prompted concerns about disruptions to global oil supplies. Iran controls a significant portion of the world’s oil reserves and, crucially, the northern side of the Strait of Hormuz, a vital shipping lane for approximately 20% of the world’s daily oil supply. Analysts at Capital Economics suggest that if Iranian oil infrastructure were targeted and oil supplies curtailed, prices could climb towards $100 per barrel, particularly if Iran were to attempt to block shipping through the Strait of Hormuz.
According to sources familiar with internal discussions, top national security officials have advised President Trump that the military could be prepared to launch strikes as early as Saturday. The situation is further complicated by stalled nuclear talks and increased military deployments in the region, including drills in the Strait of Hormuz, signaling escalating tensions between the U.S. And Iran.
Goldman Sachs analysts have cautioned that the market anticipates further escalation, potentially driving oil prices even higher. The bank’s co-head of commodities research indicated the situation is viewed as increasingly precarious. The economic impact of a conflict would be felt immediately in the oil market, with potential ripple effects on U.S. Energy prices and broader inflation, economists have warned.
South Korea’s Kospi index hit a fresh record high for the second consecutive session, even as regional markets experienced declines, reflecting the complex interplay of global economic factors and geopolitical risk. The situation remains fluid, with no immediate indication of a breakthrough in diplomatic efforts.
