Trump Threatens Strikes on Iran; Oil Still 25% Below Peak

President Donald Trump warned the US would ‘hit Iran hard again today’ after US forces struck sites near the Strait of Hormuz and Iran launched drones at the US Fifth Fleet in Bahrain. U.S. Central Command reported it disabled the Palau-flagged tanker M/T Settebello in the Gulf of Oman.

The incidents lifted West Texas Intermediate crude about 2.1% to $91 a barrel on Wednesday, with intraday moves above $93 around the latest strikes. Prices remain roughly 25% below the highs reached in April.

Three factors have limited a larger price increase. Chinese crude imports have fallen to multiyear lows. Several governments have released oil from strategic reserves. The US administration said a covert operation has moved more than 200 commercial ships and about 100 million barrels of oil through the strait since it began, with some vessels reported to have crossed at night with lights switched off.

US government data showed domestic commercial crude stocks fell by 7.2 million barrels last week, the seventh straight weekly decline and larger than analysts’ 4 million-barrel expectation. Stocks at the Cushing, Oklahoma delivery hub also declined but remained above operational minimums.

Shell Chief Executive Wael Sawan, speaking in London, said the market is ‘trying to find some equilibrium’ and is ‘more driven by short-term headlines.’ StoneX analyst Fawad Razaqzada warned the balance of risks for crude prices remains tilted to the upside if hostilities or sustained disruptions to flows through the Strait of Hormuz continue.

A tentative ceasefire agreed in late April has broken down and both sides have resumed more aggressive actions. US officials described targeted strikes intended to deter attacks on commercial traffic; Iranian officials characterized their responses as defensive.

Traders and analysts will monitor weekly inventory reports, shipping and tanker-tracking data, and public statements from US and Iranian officials for signs of escalation that could tighten supplies or of de-escalation that might ease pressure on prices.