Oil prices soared as much as 13 per cent on Monday in Asia as Donald Trump said the US would keep pounding Iran and traders braced for further disruption to global energy supplies.
Brent crude, the international benchmark, rose to $82.37 a barrel at the open, its highest price in more than a year, before trimming its gains to 9 per cent. US oil futures rose 9 per cent to more than $72 a barrel.
Futures tracking the S&P 500 and the Nasdaq 100 indicated the indices would drop 1 per cent when Wall Street reopens on Monday. The price of gold jumped 1.6 per cent.
The oil price surge came amid fears that the US and Israel’s huge military campaign against Iran could cascade across the world’s most important oil-producing region after Tehran launched retaliatory strikes on Gulf neighbours and traffic through the Strait of Hormuz dried up.
JPMorgan analyst Natasha Kaneva said: “Our base case assumed that an unprecedented disruption [to the Strait of Hormuz] would remain improbable. That assumption failed.”
She added: “The episode forces a reassessment of geopolitical risk and the resilience of global energy trade.”
Goldman Sachs noted “the main transmission channel of the Iran crisis to the global economy and macro markets is its impact on energy markets, with the combination of severity and expected longevity key”.
The US and Israeli attacks — which have hit more than 1,000 targets and killed Iran’s supreme leader Ayatollah Ali Khamenei and top military commanders — would “continue until all of our objectives are achieved”, Trump said on Sunday without offering specific details of what they were.
His comments came in a six-minute video posted to his Truth Social platform as the US president grappled with the first US casualties of the conflict and offered conflicting messages about the war’s aims.
“They have waged war against civilisation itself,” he said of the Iranian regime.
But Trump warned “there will likely be more” deaths of US soldiers as he argued that Washington’s “actions are right and they are necessary”. Three US troops have been killed and five seriously wounded.
Trump has offered several reasons for the attacks on Iran, ranging from regime change, keeping Tehran from obtaining nuclear weapons, protecting Americans and backing Iranian protesters who have sought major changes to their country.
The US president said he had fulfilled his promise to the Iranian people and that the future of their country would be in their hands after Washington made its most significant attempt to overthrow the Islamic regime since it swept to power in the 1979 revolution.
He told Iranians “who yearn for freedom to seize this moment, to be brave, be bold, be heroic, and take back to your country. America is with you. I made a promise to you, and I fulfilled that promise. The rest will be up to you, but we’ll be there to help.”
During the regime’s brutal crackdown on protests throughout Iran in January, Trump had told Iranians in a social media post that “HELP IS ON ITS WAY”, and came close to ordering strikes before holding off.
