Oil jumps on Trump signals Iran escalation

April 02, 2026 (MLN): Oil prices climbed sharply in choppy trading after U.S. President Donald Trump warned of intensified military action against Iran over the next two to three weeks, cooling expectations of a near term de-escalation and keeping global energy markets on edge.

Currently, Brent crude futures went up by $4.99, or 4.90%, to $106.93 per barrel, according to data by Mettis Global.

West Texas Intermediate (WTI) crude futures decreased by $4.73, or 4.72%, to $104.85 per barrel by [10:30 am] PST.

In a national address, Trump linked the recent spike in oil prices to what he described as “aggressive attacks” by Iran on commercial oil tankers and neighboring countries, escalating tensions across the region, according to CNBC. 

He reiterated that the United States is prepared to respond forcefully, stating that Washington will strike Iran “extremely hard” in the coming weeks while maintaining that the conflict could conclude quickly.

Despite the aggressive tone, Trump showed that diplomatic channels remain open, noting that discussions with Tehran are still underway.

“We are going to finish the job, and we’re going to finish it very fast,” he said, leaving room for a potential negotiated settlement even as military threats intensify.

Market participants interpreted the speech as a shift toward prolonged uncertainty.

George Efstathopoulos, a portfolio manager at Fidelity International, said investors had been anticipating a decisive signal either toward de-escalation or further conflict but the latest remarks suggest the situation is leaning toward escalation.

He added that this is likely to reinforce risk-off sentiment across global markets as traders await clearer direction.

The ongoing conflict has severely disrupted shipping through the Strait of Hormuz, a critical artery that typically handles around 20% of the world’s oil and gas flows.

Since hostilities escalated in late February, tanker traffic in the region has nearly stalled, contributing to one of the most significant energy supply shocks in recent years.

A swift resumption of shipping activity remains unlikely.

Earlier optimism around a potential ceasefire briefly weighed on oil prices after Trump claimed that Iran had sought a truce, contingent on reopening the Strait of Hormuz.

However, Iranian authorities rejected the claim, asserting control over the strategic waterway and dismissing U.S. statements as unfounded.

Conflicting narratives from both sides have added to market volatility, with mixed signals on diplomacy and military strategy fueling uncertainty.

While Trump has suggested that negotiations could yield a breakthrough, he has simultaneously indicated readiness to escalate the conflict, including deploying additional troops to the region.

Amid these developments, Brent crude briefly slipped below $100 per barrel following earlier remarks hinting at a possible wind-down of military operations within weeks.

However, renewed concerns over supply disruptions and geopolitical risks quickly reversed sentiment, keeping oil markets highly volatile.

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