Oil Jumps Past $86 as Trump Orders New Iran Strikes

A tanker was struck near Oman overnight and another reported a nearby explosion, as President Donald Trump ordered fresh U.S. strikes on Iran that could begin as soon as this weekend.

West Texas Intermediate crude climbed above $86 a barrel in post-settlement trading Friday after CBS reported Washington is weighing strikes on Iranian energy infrastructure, while a tanker off Oman reported being hit by an unknown projectile. The escalation, which follows the collapse of a June 17 ceasefire memorandum, threatens to choke the Strait of Hormuz — the waterway that carried about a fifth of the world's oil before the war began Feb. 28.

"The continuation of the naval blockade and warmongering by the U.S. regime will not only lock the Strait of Hormuz tighter, but will also shut down other straits and chokepoints," Mohammad Bagher Zolghadr, secretary of Iran's Supreme National Security Council, said via the state-run WANA news agency. "The price for this will be paid by the global economy, the energy market, and American voters."

The United Kingdom Maritime Trade Operations Centre said Saturday it received a report of a tanker struck by an "unknown projectile which has caused damage to the engine room" 11 nautical miles northeast of Oman, with no casualties or environmental impact reported. A second vessel in the same waters reported seeing a large splash and explosion in close proximity. Kuwait said its air defenses confronted hostile drone attacks by Iran, which has also struck U.S. bases in Kuwait and Bahrain in retaliation for a "heavy wave" of American strikes on Islamic Revolutionary Guard Corps targets over the past week.

Trump told reporters Friday at a Cabinet meeting at Camp David that he was "losing faith in them because they do lie and do, they do misrepresent," adding, "We will be hitting them very hard. And at some point they'll say we just can't take it anymore." The Wall Street Journal, citing unnamed U.S. officials, reported the president has ordered the military to launch a fresh attack that could begin as soon as this weekend, though he could call it off if diplomatic progress emerges. CBS separately reported the U.S. is considering striking oil refineries and power plants, a move advocacy groups warn could constitute war crimes.

Oil's Risk Premium Rebuilds

WTI futures rose more than 1 percent Friday to close at $84.67 a barrel, while Brent settled above 1 percent higher at $90.12 — before both extended gains in after-hours trading on the CBS report. The weekly move was still down more than 5 percent after Monday's selloff on hopes the conflict would de-escalate. The last time Brent traded above $90 was in the days after the Feb. 28 outbreak, when the Strait of Hormuz closure first forced shippers to reroute and pushed freight rates to multi-year highs.

The U.S. reimposed a naval blockade on Iranian ships July 13, preventing vessels from entering or leaving Iranian ports. Iran's response has widened the conflict beyond the Gulf: Egypt said Thursday that a drone hit two ships carrying liquefied natural gas at its Mediterranean port of Damietta, the first attack on Egyptian soil since the war began and a sign that the Bab el-Mandeb strait at the southern end of the Red Sea could become a second chokepoint.

What's at Stake

White House Press Secretary Karoline Leavitt did not directly address the strike reports but said "Iran will continue to pay until they come to the table in, what President Trump deems, a meaningful way." With the midterm elections in November and polls showing voters broadly disapproving of Trump's handling of the war and the economy, the administration faces pressure to show progress even as it weighs a deeper military campaign.

If the U.S. strikes Iranian energy infrastructure, Brent could retest its post-outbreak highs above $95, while a full closure of the Strait of Hormuz would force a rerouting of roughly 20 million barrels a day of crude and LNG, lifting shipping costs and feeding inflation across importing economies in Asia and Europe. If diplomacy revives, the risk premium could unwind as quickly as it built this week — but with both sides accusing the other of bad faith, the window for a negotiated exit is narrowing.

This article is for informational purposes only and does not constitute investment advice.