Trump meets top Iran advisors as Brent crude tops $100

President Trump convened a meeting with top national security advisors Friday to weigh further military action against Iran, as Brent crude surged past $100 a barrel for the first time since May.

President Trump met with top national security advisors Friday to weigh further military escalation against Iran, as Brent crude surged past $100 a barrel and the conflict entered its 13th consecutive night of US airstrikes.

"The situation is getting out of control," United Nations Secretary-General António Guterres told the Security Council, warning the Middle East was "teetering on the edge of the unimaginable."

Brent crude rose 6.5% to $100.19 a barrel, its highest since late May, while West Texas Intermediate gained 5.7% to $91.80. Gold fell 1.9% to $4,049.74 as the dollar strengthened and the 10-year Treasury yield climbed to its highest in more than a year. The Bloomberg Magnificent 7 Index lost $767 billion in market value after Alphabet and Tesla earnings disappointed.

The Strait of Hormuz, which handles about 21% of global oil trade, has seen traffic drop sharply as Iran asserts control and the US maintains a naval blockade. Goldman Sachs said Brent could exceed $120 a barrel in the fourth quarter if disruptions persist, with additional upside if the Bab el-Mandeb Strait and Suez Canal face prolonged interruptions.

Strait of Hormuz Disruptions Tighten Global Supply

Traffic through the Strait of Hormuz has fallen sharply, Iranian oil exports have dropped significantly, and loading activity across the Gulf has slowed, traders said. The Houthis this week attacked two Saudi oil tankers in the Red Sea near Bab el-Mandeb, opening a second front that threatens container traffic moving through the Suez Canal. Trump warned of "major military punishment" against the Houthis if the attacks continue.

The last time oil supply faced a comparable dual-threat disruption — the 2019 Abqaiq-Khurais attacks that knocked out 5.7 million barrels per day of Saudi production — Brent spiked nearly 15% in a single session before Saudi Arabia restored output within weeks. This time, the disruption is sustained rather than a one-off event, with no clear de-escalation path.

Markets Price in Prolonged Risk Premium

The US national average for regular gasoline climbed to $4.10 a gallon, up more than 17 cents from a month ago, according to AAA. Brent has climbed nearly 40% this month as traders price in escalating geopolitical risks. The rally has reignited inflation concerns, with traders increasing expectations for a September rate hike by the Federal Reserve.

The UK announced it was temporarily withdrawing diplomatic staff from Iran, and Qatar Airways suspended flights to Bahrain, Kuwait and Irbil until the end of July. Newly appointed Iraqi Prime Minister Ali al-Zaidi said after a visit to Iran he had promised not to allow attacks on Iranian soil from Iraq, after meeting Trump in Washington where he pledged to rein in Iran-backed Iraqi militias.

Iran warned it would retaliate against regional infrastructure, including energy facilities, if the US expands its campaign, and reiterated that there is little prospect of negotiations while Washington continues military operations.

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