Oil prices up 5% as Trump threatens of further escalation

Global crude prices reversed early losses on Thursday morning after US President Donald Trump said the US is going to hit Iran “extremely hard” over the next two to three weeks.

In a televised prime-time address early Thursday (India time), Trump added that the US will “finish the job pretty soon” in Iran. Oil futures had initially traded lower on hopes of a ceasefire or a possible end to the war. However, following Trump’s remarks, prices surged sharply.

At 7:54 am, the May contract of Brent on the Intercontinental Exchange was trading at $106.28 per barrel, up 5.12% from its previous close. The May contract of West Texas Intermediate (WTI) on the NYMEX rose 4.27% to $104.40 a barrel.

Trump also said that the strategic objectives in the Iran war were “nearing completion”. “America is winning, and winning bigger than ever before,” he said.

War rhetoric

Taking to X, US secretary of state Marco Rubio wrote: “President Trump delivered a powerful speech tonight. He was clear about our objectives in Iran.” He outlined the objectives as — “destroy their weapons factories”, “destroy their navy”, “destroy their air force”, “destroy their chances of ever having a nuclear weapon”.

The prospect of the war continuing for another three weeks has heightened volatility in oil markets. Around 20% of global energy supplies typically pass through the Strait of Hormuz, which is now largely disrupted.

Further, damage reported at refineries, liquefied natural gas plants, and oil and gas fields may take months—if not years—to repair and restore to pre-war capacity, experts said.

India impact

India, which imports nearly 90% of its crude oil requirement, has been significantly impacted. West Asia traditionally accounts for about 40% of India’s crude imports.

The government has, however, assured that adequate crude stocks are available and that supplies for the coming months have been tied up.

Meanwhile, oil marketing companies on Wednesday raised aviation turbine fuel (ATF) prices—one of the key derivatives of crude—by around 8.5%. In the national capital, jet fuel now costs ₹1,04,927 per kilolitre, compared to ₹96,638 in March.

LPG spike

Commercial LPG prices have also been increased by around ₹200 with effect from Wednesday, marking the second hike within a month.

In Delhi, a 19-kg LPG cylinder now costs ₹2,078.50, up ₹195.5 since the last revision on 7 March. About 65% of India’s total LPG requirement is imported, and roughly 90% of those imports earlier passed through the Strait of Hormuz, which is now largely cut off.

LPG is also a byproduct of crude refining. To cushion supply risks, India has increased its daily domestic LPG production by around 40% since the start of the war, in a bid to ensure adequate availability.