Oil Prices Spike as Trump Urges Evacuation of Tehran, Raising Alarm Over Iran-Israel Standoff and Global Energy Security

Brut oil prices increased on Monday evening following an incendiary post by President Donald Trump, warning of an imminent danger in the Iranian capital and renewing his wish to prevent the country from acquiring nuclear weapons.

The position has marked an important escalation in American rhetoric, deepening the concerns that the current confrontation of Israel-Iran could turn into a regional crisis in its own right with disastrous implications for the global energy markets.

“Iran cannot have a nuclear weapon. I said it again and again! Everyone should immediately evacuate Tehran! ” Trump posted on Truth Social, the platform belonging to his media company.

In the minutes following the position, the oil markets reacted greatly. US West Texas Intermediate (WTI) Futures jumped up to 2.7%, before stabilizing $ 72.05 per barrel, while Brent Gross, the international index, jumped 2.2% before paying 0.4% to $ 73.50. The net movement reflects a profound market anxiety as to the possibility of a military climbing in one of the most volatile and critical regions in the world.

Global markets serve as tensions increase

The reaction extends beyond the oil. US stock contracts have dropped, noting that investors are concerned that additional climbing could destabilize global markets:

• S&P 500 term contracts fell 0.4%
• Dow Futures slipped 0.4%
• The term contracts on the NASDAQ fell 0.5%

Financial analysts said that the president’s post added fuel to an already hot fire. Israel has continued its air strike campaign on Iranian military targets in recent weeks, and Tehran has warned that it would respond decisively to any threat against its sovereignty.

“Trump’s comments inject even more uncertainty, risk and volatility on the market,” said Vathnu Varathan, Macro Research Manager for Asia (ex-Japan) of Mizuho Bank. He noted that the declaration could be interpreted as a calculated warning to dissuade Iran or the opening salvo of a wider escalation.

The most immediate market concern remains the Strait of Hormuz, the narrow maritime point between the Persian Gulf and the Oman Sea. About 20% of global oil goes through this strait. Iran has long threatened to close it in retaliation for any perceived aggression of the United States or its allies.

While the world’s oil markets are moving towards the maximum season of summer demand, even the slightest disturbance through the Strait could cause a spectacular price increase and cause global energy shortages.

“A blockade remains the key risk that could push the markets in an unexplored territory,” said Janiv Shah, vice-president of the oil markets of Rystad Energy, indicating that even if the probability of a blockage is low, its potential impact is enormous. This is why we see the market price at this risk.

The American navy maintains a strong presence in the region to ensure that the strait remains open, but a direct confrontation with Iran would considerably increase the issues – and would probably trigger reprisal movements by Iranian proxies in the region, including in Iraq, Syria, Lebanon and Yemen.

BrinkManship, survival of the regime and the shadow of 2019

This is not the first time that the oil markets have been shaken by the edge involving Iran. In 2019, under the first administration of Trump, a similar confrontation on the nuclear ambitions of Iran led to oil tankers, drone shootings and a peak in oil prices, although he finally stopped having no open war.

According to Varathan, what makes the current situation more dangerous is the lack of viable diplomatic ramps. Trump’s renewed accent on Iran’s nuclear capacities can withdraw from Tehran to abandon prudent survival strategies in favor of a more aggressive posture.

“If leadership in Iran feels the change of regime on the agenda, the risk is that it can pass from survival strategies loss of loss for maximizing destruction,” warned Varathan.

Tuesday morning, there was no statement to follow up on the White House or the State Department clarifying the context of Trump’s warning or confirming the credibility of the threat to Tehran. The Iranian government, for its part, has remained provocative but cautious, indicating that it will respond to any assault “at a moment and a place of choice”.

The markets will monitor the movement on several fronts, in particular: Israel intensifies its strikes or announces larger military objectives, any sign of Iranian reprisals or closing of the shipping routes, a formal formal military repositioning in the Gulf region and diplomatic efforts of regional powers such as the Arabs Saudi, the UAEs or the Turkey to mediate or disuse the powers of Saudi.

However, the oil markets should remain very volatile, sensitive prices even to the slightest development or to the signal of Washington, Tehran or Tel Aviv.