Trump Pressure Eases As Brent Crude Tops $95
Pressure returned to oil markets on Thursday after Iran said it had targeted an American military base in retaliation for U.S. strikes in Iran the day before. Brent crude rose more than 2 percent to about $95 a barrel for August delivery, while West Texas Intermediate climbed more than 2 percent to $91 a barrel for July delivery.
The move came in the second exchange of hostilities in three days between the United States and Iran. President Donald Trump continued to assure that an agreement is close even as the confrontation renewed doubts about a peace deal and pushed traders to reassess supply risks from the Strait of Hormuz.
Strait of Hormuz shipping risk
A U.S. official said four Iranian drones that the United States knocked down on Wednesday posed a threat to American forces in the region and to commercial shipping through the Strait of Hormuz. The route is a critical transit point for oil and gas tankers, so any threat to traffic there quickly reaches energy markets before it reaches drivers or airlines.
That is the immediate friction in this exchange: Iran said it was retaliating for U.S. strikes in Iran the day before, while the United States said its forces intercepted drones that endangered both troops and commercial shipping. Traders responded first, with shares in Japan and South Korea falling half a percent on Thursday and Hong Kong stocks down more than 1 percent.
Brent and West Texas Intermediate
Brent crude’s move above about $95 a barrel for August delivery and West Texas Intermediate’s climb to $91 a barrel for July delivery showed how fast the market repriced the conflict. Futures on the S&P 500 pointed to a modest decline when stocks resumed trading in the United States on Thursday, adding another sign that investors were treating the exchange as more than a regional military event.
Drivers saw a different market signal. Gas prices fell 3 cents on Thursday to a national average of $4.43 a gallon, and diesel edged down to $5.55. Even so, since the war began, the cost of gas for drivers has risen by nearly 50 percent, and diesel remains nearly 50 percent higher.
Trump and the peace deal
Donald Trump’s public assurance that an agreement is close sits against the day’s price action and the renewed fighting. The market is not waiting for rhetoric; it is pricing the risk that the latest exchange will reach shipping lanes, fuel contracts, and stock indexes before any deal does.
What comes next is the next move from Washington and Tehran, and whether the Strait of Hormuz stays open without further drones, strikes, or market shocks.
