Oil jumps past $110 amid Trump's fresh warning to Iran
What's the story
Oil prices are on the rise due to fears of supply disruptions as US-Iran war continues to affect market sentiment. Brent crude futures rose by $1.71 or 1.6%, to $110.74 per barrel, while West Texas Intermediate crude gained $0.71 or 0.6%, trading at $112.25 per barrel as of Monday morning. Experts warn that if tensions continue, prices could hit $150 per barrel. The closure of the Strait of Hormuz is a major concern for global supply chains.
Diplomatic strain
Trump threatens Iran with military action
Tensions escalated on Sunday when US President Donald Trump warned Tehran in a strongly worded Easter Sunday social media post. He threatened that Iran's power plants and bridges could be targeted on Tuesday if the strategic Strait of Hormuz isn't reopened. The US leader's warning came as part of his continued military action against Iran, further straining diplomatic relations between the two nations.
Stalemate
Iran refuses to hold talks with US officials
Iran has told mediators that it won't hold talks with US officials in Islamabad anytime soon, according to a Wall Street Journal report. Meanwhile, OPEC+, which includes members of the Organization of the Petroleum Exporting Countries and allies such as Russia, agreed on Sunday to raise output by 206,000 barrels per day in May. However, this decision is likely to have a limited impact as many key producers can't increase supply due to ongoing conflict.
Price prediction
Oil prices may hit $150 per barrel, say experts
International brokerage Macquarie predicts that even if tensions ease in the near term, oil prices will find support in the $85-$90 range. They expect a gradual return toward $110 until normal flows through the Strait of Hormuz resume. If disruptions continue through April, Brent could still rise to $150 per barrel. Kayanat Chainwala from Kotak Securities also predicts oil may rise to $120 per barrel soon and potentially touch $150 if conflict continues.