Oil prices jumped on Monday, with Brent crude climbing above $90 per barrel after the tenth consecutive day of strikes in Iran fueled concerns that the war could further disrupt global energy supply.
The disrupted June ceasefire has added to uncertainty over whether negotiations can end the conflict. The U.S. benchmark — West Texas Intermediate crude — also rose more than 1% and was hovering around $84 per barrel. The national average for gas prices climbed back above $4 per gallon, a level last reached in May during the last spike in regional tensions.
Iranian military forces killed three U.S. service members over the weekend, leading to President Donald Trump declaring in a Sunday Truth Social Post that “the gates of HELL have now been UNLEASHED like they never could have imagined or seen before.”
The deaths brought the total number of U.S. service members killed since the war began to 17. Markets often react sharply to heightened tensions around the Strait of Hormuz, a narrow waterway through which about one-fifth of the world’s oil supply passes.
White House spokeswoman Taylor Rogers said that prices could fall if U.S. military operations significantly weaken Iran’s ability to threaten commercial shipping.
“As the U.S. military degrades the terrorist Iranian regime’s ability to attack commercial vessels and disrupt the free flow of energy through the Strait of Hormuz, oil and gas prices will plummet back to pre-conflict levels,” she said.
Iranian-backed Houthi rebels further complicated the situation by announcing a naval blockade on Saudi Arabia, warning they would target commercial vessels “in any location” if they loaded or unloaded cargo at Saudi ports. Two tankers, Xin Long Yang and Rodos, altered course Tuesday in the southern Red Sea (near the Bab el-Mandeb strait) and rerouted toward the Suez Canal following the Houthis’ warning. Saudi Arabia relies on its Red Sea ports to export millions of barrels of crude oil per day.
Asked in the Oval Office about the Houthi blockade, Trump said the United States would respond if necessary.
“If something like that happens, we take care of it,” he said. “They’ve had no problem with us for a long period of time, including during this conflict. I think that if there is something like that, we’ll just have to take care of business.”
A prolonged surge in oil prices could also threaten recent progress on inflation. June’s inflation report showed prices cooling, helped by lower energy costs, including the biggest monthly drop in energy prices since 2020. But sustained increases in crude oil could push gasoline prices higher and reignite inflationary pressures.
Higher energy costs could also create a political challenge for Republicans heading into the midterm elections, where the economy remains one of voters’ top concerns.
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