Iran’s Revolutionary Guards said they would block Middle Eastern oil exports until U.S. and Israeli strikes stop, warning that no shipments would leave the region during the conflict. In response, U.S. President Donald Trump threatened to strike Iran “twenty times harder” if it attempted to disrupt exports.
Despite the escalating rhetoric, financial markets appeared to bet that the war could end relatively soon, with oil prices retreating from their sharp surge and Asian and European equities rebounding after earlier losses. However, heavy overnight bombardment continued in Tehran, with residents describing some of the most intense strikes since the conflict began.
The fighting has severely disrupted energy trade through the Strait of Hormuz, a crucial route for about one-fifth of global oil and liquefied natural gas shipments. Attacks on shipping and halted production have forced some producers to stop pumping crude due to storage constraints.
Iran recently appointed hardliner Mojtaba Khamenei as the country’s new supreme leader following the death of his father, Ali Khamenei, early in the war. Meanwhile, Israeli Prime Minister Benjamin Netanyahu said Israel aims to weaken Iran’s leadership, though U.S. officials have largely framed the conflict as targeting Iran’s missile and nuclear capabilities.
Oil prices briefly surged close to $120 per barrel before easing as traders speculated that the conflict might end before causing a prolonged global energy shock.
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