Oil tops $115 as Trump renews threats on Iran energy infrastructure

Oil prices rose on Monday after Yemen’s Houthi group attacked Israel over the weekend, pointing to a broader scope for the war in the Middle East as the conflict enters its second month. 

Continued hostilities between Iran and the joint forces of the U.S. and Israel also showed few signs of de-escalation, with Tehran stating that it was prepared for a U.S. ground invasion as Washington deployed more troops to the Middle East. 

Moreover, oil prices returned to daily highs after U.S. President Donald Trump said the U.S. could “blow up and completely obliterate” Iran’s electric generating plants, oil wells and key export hub Kharg Island if the Strait of Hormuz is not kept “open for business.”

He added that Washington is in “serious discussions” with what he described as a “new, and more reasonable, regime” in Iran to end military operations, while warning that failure to reach a deal quickly could trigger strikes on the country’s energy infrastructure.

Brent oil futures jumped to $115.19 a barrel by 07:30 ET (11:30 GMT), while West Texas Intermediate crude futures rose 1.3% to $100.96 a barrel. 

Houthi attacks threaten to open new front in Iran war

The Yemen-based, Iran-aligned Houthis said on Sunday that they had launched a barrage of missiles against Israel, and vowed to launch more attacks.

Their joining the war sparked concerns over a potential escalation in the conflict, given that the group has the capability to attack ships passing through the Red Sea. 

"The Houthis’ weekend involvement and the arrival of additional U.S. troops underscore the conflict’s widening scope," OCBC analysts said in a note. 

"With little prospect of an imminent reopening of the Strait of Hormuz, our baseline remains for Brent to stay around USD100/bbl through mid‐year before gradually easing in [the second half of 2026]." 

Israeli forces said they were attacking targets across Iran’s capital over the weekend, while the U.S. said that it had deployed 3,500 troops in the Middle East aboard the USS Tripoli warship. 

Oil was sitting on steep gains in March, with Brent up nearly 60% as the onset of the U.S.-Israel war on Iran greatly disrupted global supplies. Iran effectively blocked the Strait of Hormuz, a key shipping lane through which roughly 20% of the world’s oil passes. 

Trump says Iran talks going well, says ceasefire could be soon

Oil markets did little to stem their advance after Trump said on Sunday evening that negotiations with Iran were ongoing and a deal was close. 

"I think we’ll make a deal with them, but it’s possible we won’t [...] I do see a deal with Iran, could be soon,” Trump said, speaking to reporters aboard Air Force One. 

Trump did not provide a clear timeline on a possible deal, but did call Iran’s new leaders "very reasonable." 

Trump also claimed that Iran had allowed 20 oil tankers to pass through the Strait of Hormuz as concessions to the United States. Reports over the weekend showed 20 Pakistan-flagged oil tankers being allowed to cross the Strait.