Brent crude climbed sharply toward $108 per barrel on Monday morning, reaching its highest level in four months after a significant supply disruption in the Middle East.
Saudi Arabia shut a major crude pipeline following drone attacks, disrupting a key route used to bypass the Strait of Hormuz amid escalating regional tensions.
The closure of the pipeline came as ships have grown increasingly reluctant to travel through the narrow Strait of Hormuz waterway due to persistent Middle East instability.
The latest price surge follows a nine per cent rally recorded last week, reflecting growing anxiety among energy markets about the reliability of global oil supply chains.
President Donald Trump added further uncertainty to the oil outlook on Sunday, suggesting the United States may choose to remain in Iran and “keep the oil” following any military resolution.
Trump drew direct comparisons between a potential Iranian oil arrangement and the US push to take control of a fifth of Venezuela’s vast oil reserves.
The President made his remarks during a trip to Ireland, where he attended meetings and watched golf, reiterating his belief that the Iran war could end this year.
Trump said he expected a resolution potentially just after the midterm elections due in the United States in November, suggesting a timeline tied closely to domestic political considerations.
He predicted that the price of gasoline would “drop like a rock” once the war concluded, offering an optimistic economic outlook contingent on a swift end to the conflict.
Trump said he would only make the “right deal” and would not agree to one that was “no good,” insisting that Iran was “calling constantly” for peace talks despite Tehran’s repeated dismissals of that claim.
“We’ll ultimately get out (of Iran), unless we decide to stay and keep the oil like Venezuela,” Trump said, adding that US revenue from Venezuela has “paid for the war many times.”
The remarks are likely to keep energy markets on edge as traders weigh the possibility of prolonged US involvement in Iran against the prospect of a negotiated settlement easing supply pressures.