Oil soars, Asian markets dip as Trump says US will keep hitting Iran

• Trump: war will take another ‘2 to 3 weeks’
• Brent up 6.3%, WTI gains 5.3%
• Asian markets and gold slide

Oil prices rose early on Thursday after US President Donald Trump conveyed mixed messages to the nation, saying the war against Iran is “nearing completion” but will take another “two to three weeks”.

Brent crude futures were up $6.33, or 6.3 percent, at $107.49 per barrel by 04:07 GMT. West Texas Intermediate crude futures gained $5.28, or 5.3 percent, to $105.40 per barrel.

Asian markets slid, along with US gold futures.

Trump said from the White House that US forces were quickly dismantling Iran’s military and Revolutionary Guard Corps, missile and drone capabilities, defence industrial base and chances of ever building a nuclear weapon. 

“I can say tonight that we are on track to complete all of America’s military objectives shortly. Very shortly,” he said. “We are going to hit them extremely hard over the next two to three weeks. We’re going to bring them back to the Stone Ages, where they belong.” 

Talks continue, Trump said, with what he described as a “less radical and much more reasonable” Iranian leadership after US and Israeli strikes killed many top officials since the war began on February 28.

“If there is no deal, we are going to hit each and every one of their electric generating plants very hard and probably simultaneously,” he said.

Iranian retaliation has virtually stopped energy and commercial shipping through the Strait of Hormuz, a chokepoint for oil, gas and other commodities. 

Data platform TankerTrackers said on Wednesday that no LNG-laden vessels left the waterway, which typically funnels a fifth of global supply, during March.

Of the few oil tankers that have transited since March 1, more than 70 percent had direct links to Iran, with Chinese shipments accounting for another 10 percent, according to a new analysis by Lloyd’s List Intelligence cited by CBS News. 

Iranian attacks have damaged oil and gas facilities in Kuwait, Qatar, Saudi Arabia and the UAE, shutting in most production with the exception of bypass pipelines to the Emirati port of Fujairah on the Gulf of Oman and the Saudi port of Yanbu on the Red Sea. 

These disruptions triggered a far-reaching energy crisis that has caused jet fuel shortages in Vietnam, early restaurant closures in Egypt, and the EU to urge people to work from home.  

The heads of the International Energy Agency, International Monetary Fund and World Bank said on Wednesday they would more closely coordinate “to maximize their institutions’ response to the energy and economic impacts of the war in the Middle East”.

“[The impact] is already transmitted through higher oil, gas and fertilizers prices, and is triggering concerns about food prices as well,” they said in a joint statement. 

“Global supply chains — including of helium, phosphate, aluminum, and other commodities — are affected, as is tourism due to flight disruptions at key Gulf hubs.” 

Further reading:

• Arab oil capacity dented as Iran war forces output cuts
• Dozens of energy assets ‘severely’ damaged during Iran conflict
• Aramco oil exports spike after shift to Red Sea ports

The UAE ambassador to the UN asked the secretary-general and the Security Council president in a letter on Tuesday to take “immediate action” to open Hormuz, Bloomberg reported. 

But, rehashing his most recent social media posts, Trump said the strait will reopen “naturally” as soon as hostilities end. He simultaneously urged the countries most affected by the halt in Gulf energy exports to “build up some delayed courage… go to the strait and just take it”. 

He did not address the rumoured possibility that US forces may be planning ground operations in the area.