Oil prices rose on Wednesday after US President Donald Trump warned Iran against reaching a deal and reopening the Strait of Hormuz, keeping energy markets closed to the risk of a long-term supply shock.
WTI rose back above $100, trading near $105 at press time and up more than 6% on the day, while Brent crude rose nearly 5% and traded above $110, as traders priced in the risks of extended unrest linked to the US-Iran conflict.
Trump Issued Iran issued a new warning to Tehran early on Wednesday, calling on the regime to get smart soon and accept American demands to tighten controls on its nuclear program.
This warning comes at a time when talks are still stalled regarding the Iranian nuclear program and the reopening of the Strait of Hormuz, one of the most important energy shipping routes in the world. Reuters reported that prices rose after reports that the United States may extend its blockade of Iranian ports, while the Wall Street Journal reported that Trump asked his aides to prepare for a longer pressure campaign.
The scope of the escalation also expanded beyond Hormuz. A senior Iranian lawmaker renewed the threat that Tehran may ask Houthi allies in Yemen to disrupt the Bab al-Mandab Strait if the United States continues to intercept Iranian ships, increasing the risk of pressure through another major energy corridor in the Middle East.
Defense Secretary Pete Hegseth faced lawmakers Wednesday for the first time since the Trump administration launched its joint war with Israel against Iran. The hearing, originally focused on the Pentagon’s proposed $1.5 trillion 2027 budget, quickly turned into a battle over the war’s cost, strategy, and lack of congressional approval.
Democrats accused the White House of entering into an unnecessary conflict without authorization from Congress, while Hegseth defended the administration’s handling of the war. The Associated Press reported that Pentagon officials put the estimated cost of the conflict at about $25 billion so far, primarily related to munitions and operations.
