Oil Prices Surge Above $111 as Trump Sets Deadline for Iran to Reopen Strait of Hormuz

Oil prices surged above $111 per barrel on Tuesday as a deadline set by U.S. President Donald Trump for Iran to reopen the Strait of Hormuz drew near, with global markets gripped by uncertainty over whether the six-week-old conflict would escalate dramatically before midnight. Trump set a deadline of 8 p.m. Eastern Time on Tuesday — midnight Greenwich Mean Time Wednesday — for Tehran to agree to a deal to end the war and restore freedom of navigation through the strait. Iran rejected a U.S. ceasefire proposal mediated by Pakistan, demanding instead a permanent end to the war and the lifting of sanctions. Brent crude futures rose 1.6% to $111.51 a barrel, while U.S. West Texas Intermediate crude futures climbed 3.1% to $115.86 a barrel, according to RTE. The New York Times reported that Brent is up approximately 52% since the war began on February 28, while WTI has risen more than 60% over the same period.

2026-02-28: 73, 2026-04-07: 111.51

The U.S.-Israel war on Iran began on February 28, 2026, with Operation Epic Fury, which killed then-Supreme Leader Ali Khamenei in initial strikes. Iranian forces effectively shut the Strait of Hormuz in response to those attacks, cutting off a waterway that normally carries about one-fifth of the world's oil and natural gas supply. The closure has sent energy prices surging globally and disrupted exports from multiple Gulf producers. Trump has imposed and extended self-imposed deadlines on Iran in recent weeks, but the rhetoric sharpened markedly in the days leading up to the Tuesday deadline.

Trump threatens to destroy bridges and power plants by midnight Trump warned on Monday that Iran could be "taken out" if it failed to meet his Tuesday night deadline, and said the U.S. military could destroy "every bridge in Iran by 12 o'clock tomorrow night" if no deal was reached. He also threatened to render Iranian power plants "burning, exploding and never to be used again," according to Bloomberg, brushing off concerns that targeting civilian infrastructure would constitute a war crime. Trump described freedom of navigation through the Strait of Hormuz as "a very big priority" and said he believed some Iranian leaders were negotiating in "good faith," though the outcome remained uncertain. Iran responded by warning it would ramp up its own attacks on energy infrastructure in the Persian Gulf if its civilian infrastructure were struck. Saudi Arabia said on Tuesday it intercepted and destroyed seven ballistic missiles launched toward its Eastern Region, with debris falling near energy facilities, according to RTE. Explosions were also heard in the Syrian capital Damascus and surrounding areas, caused by Israeli interception of Iranian missiles, Syrian state television reported.

„Any follow-through on threats to target Iran's power infrastructure would mark a significant escalation, raising the risk of retaliatory action that could further disrupt Gulf energy facilities.” — Vasu Menon via Reuters

Markets frozen in wait-and-see mode as countdown ticks Global stocks wavered on Tuesday, with investors largely sidelined as the deadline approached. MSCI's broadest index of Asia-Pacific shares outside Japan was 0.4% higher, while Japan's Nikkei erased early gains to trade 0.2% lower, according to Reuters. U.S. stock futures slipped 0.55%, while European futures pointed to a slightly higher open after markets in the region were closed for public holidays on Friday and Monday. A record-breaking quarterly profit forecast from Samsung Electronics provided a brief lift to Asian markets before the weight of the energy shock reasserted itself. Gold prices steadied, with spot gold slipping 0.1% to $4,640.93 per ounce, as investors balanced gold's traditional role as an inflation hedge against the dampening effect of higher interest rates on non-yielding assets. Ilya Spivak, head of global macro at Tastylive, said markets were in a holding pattern pending the outcome of Trump's ultimatum.

„Everyone is in a mode where we're waiting for whatever the outcome is of this diatribe that the President has been on for the past several days.” — Ilya Spivak via Reuters

„We are back on a Trump imposed countdown clock and there's no way to predict with any confidence what will happen.” — Kyle Rodda via Reuters

Inflation fears mount as Fed officials rule out rate cuts The prolonged closure of the Strait of Hormuz has sent shockwaves through the global economy, with data released Monday showing U.S. services sector growth slowed in March while prices paid by businesses for inputs rose by the most in more than 13 years. Cleveland Fed President Beth Hammack and Chicago Fed President Austan Goolsbee both identified inflation as a far bigger concern than employment, reinforcing expectations of tighter monetary policy. Markets are pricing in no Fed rate cuts at all in 2026, according to the CME FedWatch tool cited by Reuters. European natural gas prices also edged higher, with Dutch front-month futures — Europe's gas benchmark — trading 1.5% higher at €50.80 per megawatt-hour, having jumped more than 55% since the start of the war, according to Bloomberg. U.S. gasoline prices rose to a national average of $4.12 per gallon on Monday, up 38% since the war began, according to the AAA motor club as cited by the New York Times. The UN Security Council was expected to vote on Tuesday on a resolution to protect commercial shipping in the Strait of Hormuz, though in a significantly watered-down form after China opposed authorizing the use of force, according to RTE.

55% (increase) — European natural gas price rise since war began

Brent Crude: 52, WTI Crude: 60, US Gasoline (national avg): 38, European Natural Gas: 55