US-Iran war: Crude oil prices surged sharply on Thursday, April 2, after US President Donald Trump stated that the United States would continue to attack Iran aggressively without committing to a specific timeline to end the war.
In India, oil prices on Multi Commodity Exchange (MCX) surged as much as 5.66% to ₹9,775 per barrel on Thursday, tracking global oil prices.
On the international front, , the global benchmark, surged 5% to $106.22 per barrel, while US benchmark crude climbed 4.2% to $104.36 per barrel on Thursday.
What’s driving crude oil prices today?
In a televised address, said the US military was close to achieving its objectives in the war with Iran and suggested the conflict could end soon, though he did not provide a clear timeline.
He added that nations dependent on oil shipments through the key strait should take primary responsibility for safeguarding them, and claimed the route would “naturally” reopen after the war ends, without elaborating.
According to a Reuters report, risks to maritime traffic have escalated as the conflict deepens across the region. On Wednesday, an oil tanker leased by QatarEnergy was struck by an Iranian cruise missile in Qatari waters, the country’s defence ministry was quoted as saying by Reuters.
Earlier in the week, Trump warned the US could target Iranian infrastructure, including power plants, if the Strait remains closed. However, he later urged other countries to take charge of securing the passage, with the United Arab Emirates among Gulf states pushing for a United Nations mandate to use force to reopen it.
Meanwhile, a Bloomberg report revealed that Iran’s Foreign Minister Abbas Araghchi said Tehran and Oman would determine the strait’s future. State broadcaster IRIB also reported that the Islamic Revolutionary Guard Corps dismissed the possibility of reopening Hormuz under what it described as the US president’s “absurd” posturing.
Crude oil prices outlook
According to Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities, Brent remains well supported above $95–96, with $120 acting as a near-term ceiling. But the market is no longer trading fundamentals alone — it is trading geopolitics and escalation risk.
“Even a partial disruption would force aggressive inventory drawdowns, trigger a sharp spike in time spreads and backwardation, and keep volatility elevated. We are already seeing this dynamic through the ‘Brent-on, everything-off’ trade, where energy price shocks tighten dollar liquidity and pressure metals, bullion, and equities,” Banerjee said.
Robert Rennie, head of commodity research at Westpac Banking Corp, was quoted as saying by Bloomberg that is expected to trade between $95 a $110 a barrel in the near term.
“Nothing in Trump’s speech alters the underlying market reality: the strait has effectively been closed for a month, and flows remain materially constrained with at least several weeks of disruption still likely, if not more,” Rennie said.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.