Oil jumps as Donald Trump vows to continue striking Iran

Edited by Peter Wells and Adam Samson in New YorkSteff Chávez and James Politi in WashingtonOil prices soared as much as 13 per cent on Monday in Asia as Donald Trump said the US would keep pounding Iran and traders braced for further disruption to global energy supplies.Brent crude, the international benchmark, rose to $82.37 a barrel at the open, its highest price in more than a year, before trimming its gains to 9 per cent. US oil futures rose 9 per cent to more than $72 a barrel.Futures tracking the S&P 500 and the Nasdaq 100 indicated the indices would drop 1 per cent when Wall Street reopens on Monday. The price of gold jumped 1.6 per cent.The oil price surge came amid fears that the US and Israel’s huge military campaign against Iran could cascade across the world’s most important oil-producing region after Tehran launched retaliatory strikes on Gulf neighbours and traffic through the Strait of Hormuz dried up.“Our base case assumed that an unprecedented disruption [to the Strait of Hormuz] would remain improbable. That assumption failed,” JPMorgan analyst Natasha Kaneva said. She added: “The episode forces a reassessment of geopolitical risk and the resilience of global energy trade.”Goldman Sachs noted “the main transmission channel of the Iran crisis to the global economy and macro markets is its impact on energy markets, with the combination of severity and expected longevity key”.Donald Trump gives an update on the military operation against the Iranian regimeThe US and Israeli attacks — which have hit more than 1,000 targets and killed Iran’s supreme leader Ayatollah Ali Khamenei and top military commanders — would “continue until all of our objectives are achieved”, Trump said on Sunday without offering specific details of what they were.His comments came in a six-minute video posted to his Truth Social platform as the US president grappled with the first US casualties of the conflict and offered conflicting messages about the war’s aims.“They have waged war against civilisation itself,” he said of the Iranian regime.But Trump warned “there will likely be more” deaths of US soldiers as he argued that Washington’s “actions are right and they are necessary”. Three US troops have been killed and five seriously wounded.Trump has offered several reasons for the attacks on Iran, ranging from regime change, keeping Tehran from obtaining nuclear weapons, protecting Americans and backing Iranian protesters who have sought major changes to their country.The US president said he had fulfilled his promise to the Iranian people and that the future of their country would be in their hands after Washington made its most significant attempt to overthrow the Islamic regime since it swept to power in the 1979 revolution. He told Iranians “who yearn for freedom to seize this moment, to be brave, be bold, be heroic, and take back to your country. America is with you. I made a promise to you, and I fulfilled that promise. The rest will be up to you, but we’ll be there to help.”During the regime’s brutal crackdown on protests throughout Iran in January, Trump had told Iranians in a social media post that “HELP IS ON ITS WAY”, and came close to ordering strikes before holding off.Jamie Smyth in New YorkConcerns that US and Israeli attacks against Iran could lead to a prolonged conflict that disrupts global energy supplies buoyed oil prices.About an hour after energy futures markets opened in Asia on Monday, contracts for Brent crude and West Texas Intermediate were 8.3 per cent and 7.6 per cent higher, respectively. Activity in the Strait of Hormuz, the narrow chokepoint at the mouth of the Gulf through which a fifth of the world’s oil and gas flows, slowed to a near stop on Sunday as Iran claimed responsibility for attacks on three ships near the waterway. The jump in oil prices came despite a decision by the producer group Opec+ on Sunday to increase its production from April. Analysts warned that producing extra oil would have little impact on the market if there continued to be disruption to Middle Eastern oil supplies.Wood Mackenzie said oil prices could hit $100 per barrel if tanker flows through the strait are not quickly restored. Analysts compared the situation to the early days of the war in Ukraine when fear of loss of Russian supply pushed prices to $125 per barrel.Any prolonged surge in oil prices would increase inflationary pressure on the global economy and complicate Donald Trump’s efforts to keep a lid on US petrol prices ahead of the midterm elections in November.The US said on Saturday it had not discussed releasing any reserves from the nation’s strategic petroleum to tame any price rises.Lucy Fisher in London Sir Keir Starmer is under pressure to allow MPs to vote on whether the US should be allowed to use British military bases to launch strikes against Iran.The Liberal Democrat opposition party said the UK prime minister must set out the government legal case in full and put his decision to a vote in the House of Commons on Monday. Starmer on Sunday announced London had granted Washington permission to use Diego Garcia in the Indian Ocean and the Royal Air Force Fairford base in Gloucestershire to launch attacks against Tehran. He has published a brief summary of the UK government legal advice for the “defensive” move, which is centred on UK self-defence and the collective self-defence of allies. The British military itself is not participating in offensive strikes.Kate Duguid in New YorkGold prices rose as the conflict between the US and Iran drove investors into haven assets.Prices rose 1.6 per cent at the open of the futures market for the precious metal to a high of $5,369.6 an ounce, approaching record levels hit in January. Earlier, the dollar rose in early Asia trading, also indicating haven demand for the currency.Tokyo’s foreign exchange market opens at 7pm New York time, with further support for the dollar expected.George Steer in New YorkUS stocks are expected to open lower on Monday.Futures contracts tracking Wall Street’s benchmark S&P 500 index fell 1 per cent in early Asia trading.Contracts tracking the tech-heavy Nasdaq 100 slipped 1.1 per cent.The US and Israel’s attack on Iran came at the end of a volatile week for US stocks, with shares in banks and software groups down sharply over concerns about AI disruption and the health of private credit markets.Peter Wells in New YorkThe price of oil has jumped as energy futures markets opened for the first time since the US and Israel launched Saturday’s joint strike on Iran.The price of Brent crude, the global oil marker, rose 13 per cent to more than $82 a barrel as trading recommenced in Asia on Monday.Brent has gained 19.1 per cent in 2026. Its settlement price on Friday was $72.48 a barrel.Claire Jones in WashingtonA prolonged rise in oil prices to more than $100 per barrel could trigger stagflation, raising consumer prices and weakening growth, economists have warned.Brent crude initially surged to $82 when markets reopened in Asia on Monday, still shy of the triple-digit threshold.Krishna Guha, vice-chair at Evercore ISI, forecast “risks to inflation expectations”, with any sustained closure of the Strait of Hormuz risking “quantity constraints as well as price impacts”.An interruption to Qatari natural gas “would be highly material for Europe”, he said.Johanna Chua at Citi said: “While historical geopolitical shocks have been shortlived, the current situation, including potential Strait of Hormuz closures and the resilience of the Iranian regime, introduces uncertainty.” Emerging markets were particularly exposed to the risk of an inflationary shock, she added.Ian Smith in LondonThe US dollar could be set for gains through the trading day if oil prices rise.Higher energy prices could stoke inflation, which could slow any further loosening in US monetary policy conditions.“The dollar is a bit firmer against markets which open first,” said Chris Turner, ING’s head of markets research, referring to the currencies of Australia and New Zealand that weakened against the greenback when their trading desks opened on Monday morning local time.“I would have thought that the dollar [rises] across the board, on the spike in oil prices,” Turner said, predicting the greenback would be the recipient of robust investor demand.That could reinforce some of the moves it has enjoyed today.“Safe-haven flows still favour the dollar when it’s a Middle East shock,” said Trevor Greetham, head of multi-asset investing at Royal London Asset Management.Lucy Fisher in LondonThe UK will allow the US to use British military bases to launch attacks on Iranian missile depots and launchers.UK Prime Minister Sir Keir Starmer said on Sunday the move was “in line with international law”, as it underscored the “collective self-defence of longstanding friends and allies”, and would help protect British lives.London has given permission for the Royal Air Force Fairford base in Gloucestershire and the joint UK-US base of Diego Garcia in the Chagos Islands to be used, according to officials. Use of the latter military facility requires approval by the UK.In a video clip posted on X, Starmer said the only way to stop the threat from Iran was to destroy the missiles at source or their launchers. “The US has requested permission to use British bases for that specific and limited defensive purpose,” he said.My update on the situation in the Middle East. pic.twitter.com/DvsOVcTDMyLondon had been reluctant to allow Washington to use Diego Garcia or RAF Fairford to launch initial strikes against Tehran amid officials’ concern about compliance with international law.Starmer stressed Britain was not joining the strikes against Iran, but would continue with “defensive actions” in the region.Steff Chávez in Washington Donald Trump said the US military campaign against Iran is ongoing and vowed that it would “continue until all of our objectives are achieved”.More US soldiers would probably be killed, Trump conceded in a six-minute video he posted on his Truth Social platform on Sunday.Trump claimed the US had killed the “entire” Iranian military command and argued he was using the military he leads “for good”, calling the campaign “right” and “necessary” to protect Americans.Donald Trump gives an update on the military operation against the Iranian regimeHe repeated his call for members of the Islamic Revolutionary Guard Corps to “lay down your arms and receive full immunity or face certain death”.Trump also said he had fulfilled his promise to the Iranian people, and that the future of their country was now in their hands. During the regime’s brutal crackdown on protests throughout Iran in January, Trump had told Iranians in a post that “HELP IS ON ITS WAY”.On Sunday, Trump told Iranians “who yearn for freedom to seize this moment . . . and take back to your country. America is with you. I made a promise to you, and I fulfilled that promise. The rest will be up to you, but we’ll be there to help.”Adrienne Klasa in ParisThe leaders of France, Germany and the UK condemned the “indiscriminate” attacks by Iran across the Middle East, threatening “proportionate defensive action” to defend their interests.They added Iran’s “reckless” attacks had targeted allies and threatened civilian and military personnel.“We call on Iran to stop these reckless attacks immediately,” President Emmanuel Macron, Prime Minister Keir Starmer and Chancellor Friedrich Merz said in a statement on Sunday night.Actions could include measures “to destroy Iran’s capability to fire missiles and drones at their source. We have agreed to work together with the US and allies in the region on this matter”, the trio said.Adam Samson in New YorkTurkey’s central bank has taken steps to steady the lira as the crisis in the Middle East puts pressure on emerging-market currencies.The central bank said late on Sunday Ankara time that it would suspend one-week repo auctions in response to “market developments”. The move is aimed at relieving pressure on the lira driven by a jump in demand for dollars.Turkey also launched lira-settled foreign exchange forward transactions “in order to ensure the sound functioning of the foreign exchange market, prevent possible volatilities in exchange rates and stabilise foreign exchange liquidity”. Finance minister Mehmet Şimşek chaired a meeting of Turkey’s Financial Stability Committee on Sunday to discuss the effects of the US-Israeli strike on Iran.Peter Wells in New YorkThe dollar rose in early Asian trading on Monday, as conflict in the Middle East prompted traders to gravitate towards the relative safety of the greenback.The US currency was 0.4 per cent stronger against the euro, and strengthened 0.1 per cent against Japan’s yen, which tends to be a steady performer in times of geopolitical crisis.Liquidity is often thin when currency desks in New Zealand and Australia open on Monday morning local time, meaning moves can be exaggerated.The Australian and New Zealand dollars, which typically underperform during periods of heightened geopolitical risk, were weaker against the greenback by 1 per cent and 0.8 per cent, respectively.Kate Duguid in New YorkTraders will have their first big opportunity to express views on the US-Iran conflict when the market for Brent and West Texas Intermediate crude oil futures opens at 6pm New York time on Sunday.Oil prices are expected to rise in the short term on the expectation that trade through the Strait of Hormuz may be affected by the conflict.US stock futures and Treasury bond futures also open at 6pm New York time.The foreign exchange market in the antipodes has already commenced their Monday session, but trading is thin during these hours, meaning the prices quoted during this period are often distorted by low liquidity. The foreign exchange market will open in earnest when Tokyo opens at 7pm New York time.Israel and Iran continued to trade fire on Sunday, with Iranian drone and missile barrages setting off sirens across Israel.The burgeoning conflict in the Middle East has severely disrupted shipping in the oil-rich Gulf and is expected to push up energy prices when markets reopen.Donald Trump said the military campaign against Iran could last four weeks and that he was satisfied with its progress. He dismissed concerns about any impact on energy prices.Trump also said, “I will be talking” to new Iranian leadership, without giving more details, and that nine Iranian naval vessels had been sunk.The leaders of France, Germany and the UK condemned Tehran’s “indiscriminate” attacks across the Middle East and threatened “proportionate defensive action” to defend their interests.The UK will allow the US to use British bases, including Diego Garcia in the Chagos Islands, to launch attacks on Iran.Opec+ is to raise oil output in an attempt to calm markets after Iran’s supreme leader Ayatollah Ali Khamenei was killed in joint US-Israeli air strikes.At least 45 people have been reported killed on Sunday across the region.The US military said three of its soldiers were killed and five seriously wounded, the first reported American casualties.Comments have not been enabled for this article.