Trump warns of new strikes on Iran as oil stays 25% below peak

Former President Donald Trump warned of additional strikes on Iran after U.S. forces hit targets near the Strait of Hormuz and Iran launched drones toward the U.S. Fifth Fleet in Bahrain. U.S. Central Command said it disabled the Palau-flagged tanker M/T Settebello in the Gulf of Oman following a series of maritime confrontations.

Trump said the United States would “hit Iran hard again today” and disclosed a covert operation he ordered to keep oil moving through the strait. According to people with knowledge of the operation, more than 200 commercial vessels and about 100 million barrels of oil have been steered through the waterway since the mission began, with some ships transiting at night with lights off.

U.S. oil futures responded modestly. West Texas Intermediate crude rose 2.1% to about $91 a barrel on Wednesday after the latest exchanges, with some contracts earlier trading above $93. Prices remain roughly 25% below the April crisis peak.

Three main factors have limited a larger price surge. China’s crude imports have fallen to multiyear lows, reducing demand. Several governments have released emergency oil reserves to add supply. U.S. and commercial operators have maintained flows through the strait by routing tankers covertly, preserving some physical supply despite the attacks and strikes.

U.S. Energy Information Administration data showed commercial crude stocks fell by 7.2 million barrels last week, the seventh consecutive weekly draw and larger than the roughly 4 million-barrel decline analysts expected. Inventories at the Cushing, Oklahoma delivery hub also declined but remained above operational minimums.

The gap between physical and paper oil prices that opened earlier in the crisis has narrowed. Physical Brent briefly reached much higher levels in April while futures traded lower; that split has decreased as markets adjusted.

Wael Sawan, chief executive of Shell, said at a CEO council that “at the moment the market is trying to find some equilibrium. It’s more driven by short-term headlines.” Fawad Razaqzada of StoneX noted that the balance of risks to crude forecasts remains tilted to the upside if tensions escalate further.

Iran’s government vowed to resist any threats. A ceasefire that took effect in late April has since broken down, and markets are watching whether the latest exchanges will disrupt supply flows on a sustained basis.

Traders continue to react to daily developments, and U.S. government steps to maintain shipments through the Strait of Hormuz have coincided with strategic reserve releases and weaker demand from key buyers, which have together kept prices below the spring highs.