LONDON, April 2 (Reuters) – Oil prices climbed to around $110 a barrel on Thursday after President Donald Trump said the U.S. would continue attacks on Iran, stoking fears of prolonged disruptions to oil supply.
Brent crude futures LCOc1 were up $7.96, or 7.9%, to $109.12 per barrel at 1302 GMT. U.S. West Texas Intermediate crude CLc1 futures were up $12.48, or 12.5%, at $112.60 per barrel, touching their highest since March 9 and heading for their biggest absolute price rise since 2020.
Still, both benchmarks remained below highs near $120 a barrel touched earlier in the conflict.
“We’re going to hit them extremely hard over the next two to three weeks,” Trump said. “We’re going to bring them back to the Stone Ages where they belong.”
He gave no details on any steps that could lead to a reopening of the Strait of Hormuz.
Markets are reacting to the absence of any “clear mention of ceasefire or diplomatic engagement” in the speech, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
“If tensions intensify or maritime risks increase, oil could test fresh highs as markets price in potential supply disruptions.”
AP Photo/Alex Brandon, Pool
BRITAIN HOSTS TALKS ON REOPENING HORMUZ
Britain is hosting a virtual meeting of around 40 countries to discuss options for reopening Hormuz. The United States is not due to attend.
Some market participants said they had stopped dealing with cargoes priced off the Dubai Middle East benchmark, normally used to value nearly a fifth of global crude supply, because ports inside the Strait of Hormuz cannot be used.
OPEC+, meanwhile, is likely to weigh a further oil output increase on Sunday, sources said, a move that would position members to add more barrels should the Strait of Hormuz reopen but is not likely to meaningfully increase supply before then.
In Russia, Ukraine’s strikes on port infrastructure, pipelines and refineries have reduced export capability by 1 million barrels per day, or a fifth of total capacity, sources say, enough to set the stage for imminent production cuts.
The head of the International Energy Agency also warned that supply disruptions would start to affect Europe’s economy in April, after the region had previously been shielded by cargoes contracted before the start of the war.
(Additional reporting by Colleen Howe and Sudarshan Varadhan. Editing by Stephen Coates, Mark Potter and Louise Heavens)
