Iran Escalates Ship Attacks as Oil Prices Surge, Trump Vows Response

Tehran has intensified attacks on vessels in Gulf waters, causing two tankers to catch fire and forcing Iraqi oil ports to suspend operations. Oil prices have jumped nearly 9% above $100 per barrel as Iran warns of potential $200 oil, while global stock markets decline on escalating tensions.

Global markets are reeling as Iran escalates maritime attacks in Gulf waters, sending oil prices soaring and prompting warnings of $200-per-barrel crude from Tehran officials.

Two fuel tankers caught fire in Iraqi waters following strikes by Iranian explosive-laden vessels, forcing the nation’s oil ports to shut down operations. Oman has evacuated all ships from its primary oil export facility as a precautionary measure.

The attacks pushed Brent crude futures up nearly 9% to $100.07, after reaching $119.50 earlier this week. U.S. crude prices climbed 8% to $94.25.

When questioned about the escalating conflict, President Trump stated the United States was “going to look very strongly at the straits.”

The International Energy Agency’s announcement of a record 400 million barrel release has done little to calm markets, as analysts note this represents only about 20 days’ worth of lost supply, suggesting investors fear prolonged disruptions rather than short-term fixes.

Global stock markets tumbled on the news. The MSCI Asia-Pacific index outside Japan dropped 1.6%, ending two consecutive days of gains. Japan’s Nikkei fell 1.7%, while S&P 500 and Nasdaq futures each declined 1%. European markets also retreated, with EUROSTOXX 50 futures sliding 1.1%.

The crisis is expected to fuel inflation concerns, pushing bond markets to increase borrowing costs worldwide. Market analysts are now abandoning expectations of interest rate cuts, with traders predicting none of the five central banks meeting next week in the United States, Europe, Britain, Australia and Canada will lower rates. Australia is expected to raise rates instead.

U.S. Treasury yields reflect the uncertainty, with two-year rates hitting their highest levels since August. The 10-year bond continues struggling after a weak auction, placing focus on today’s 30-year bond sale as investors question locking in current yields amid rising inflation threats.

Thursday’s key market events include the 30-year U.S. bond auction, January trade data release, initial jobless claims figures, and remarks from Federal Reserve Vice Chair for Supervision Michelle Bowman.