Oil prices hold firm after Trump’s latest comments on Iran
Brent crude’s price has remained well above $110/bbl after US President Donald Trump threatened to “completely obliterate” Iran’s energy infrastructure, if no agreement is reached.
IMAGE: Flags of the US and Iran. Getty Images
Trump has threatened to "blow up" Iran’s highly valued Kharg Island, along with its oil wells and desalination plants, if ongoing negotiations to reopen the Strait of Hormuz yield no outcome.
The US will dismantle “all of their [Iran’s] Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!), which we have purposefully not yet touched,” Trump wrote on the social media platform Truth Social.
Kharg Island – located about 20 miles off Iran’s coast – accounts for roughly 90% of the country's oil exports, NBC News reported. Targeting the terminal would knock out a large share of Iran’s oil supply, according to market analysts.
The latest threat follows Trump’s claim that Tehran has accepted “most” elements of a 15-point ceasefire proposal delivered via Pakistan.
Iran’s government, however, has rejected the idea of any direct talks with Washington, insisting that it has not participated in diplomatic forums initiated by Pakistan.
Overnight, an Iranian missile hit a Kuwaiti crude oil tanker, Al Salmi, causing a fire onboard while anchored at Dubai port in the UAE, Kuwait’s state news agency Kuna reported.
The Kuwait Petroleum Corporation said the vessel was fully loaded at the time of the attack and warned of a possible oil spill, according to Reuters.
“Iran has moved to formalise its control over the Strait of Hormuz, restricting vessel movements while allowing limited traffic,” two analysts from ING Bank said.
Roughly a month into the US-Israel conflict with Iran, the crisis has effectively curtailed most commercial traffic through the Strait of Hormuz – a key conduit for global energy flows. The waterway typically carries about 20% of the world’s seaborne oil supply.
“A toll or selective access through Hormuz would keep a persistent risk premium in oil, as flows could be curtailed at short notice,” ING Bank’s analysts added.
By Aparupa Mazumder
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