Oil Price Hits $126/Barrel, Highest Since 2022, as Trump Mulls Fresh Iran Options

Emmanuel Addeh in Abuja

Oil prices jumped to their highest level since 2022 after a report that the US military is set to brief President Donald Trump on new plans for potential action in the Iran war. Brent crude rose by almost 7 per cent to more than $126  a barrel at one point, before falling back.

US Central Command has prepared a plan for a wave of “short and powerful” strikes on Iran to try to break the deadlock in negotiations with Tehran, news site Axios reported.

Trump is expected to hear about the updated military options for Iran from Pentagon officials as he pressures Tehran into agreeing to a deal, a source familiar with the matter said. Trump is routinely updated on military plans, and there was little to indicate his previous reluctance to restart the US bombing campaign was waning.

The briefing was expected to include Adm. Brad Cooper, the commander of US Central Command, and Gen. Dan Caine, the chairman of the joint chiefs of staff, along with other senior military officials.

Trump’s current strategy is designed to inflict as much economic pain as possible on Iran in the hopes the country will cave to his demands on curbing its nuclear programme. He has told his top advisers in recent days he wants the US naval blockade of Iranian ports to continue, sources familiar with the talks said, and his team has begun laying the groundwork for such an extension, including a longer-term closure of the Strait of Hormuz.

“The blockade is genius,” the president told reporters  when asked how long it would continue. “Now, they have to cry uncle, that’s all they have to do. Just say, ‘We give up,’” he added.

While the Pentagon has continued making preparations should the president decide to resume his bombing campaign, Trump has long indicated internally that he would prefer making a deal with the Iranians and avoid further kinetic attacks, the sources familiar with the matter said.

But energy prices have been rising this week as peace talks appear to have stalled, with the key Strait of Hormuz waterway still effectively closed, a BBC report said.

About 20 per cent of the world’s oil and Liquefied Natural Gas (LNG) usually passes through the strait and the conflict has sent global energy prices soaring.

Brent crude touched $126.31 a barrel earlier on Thursday, the highest since Russia’s full-scale invasion of Ukraine. However, the price then fell back sharply later in the day to around $114.

The sharp switch in the oil price was partly being blamed on a deadline for deals known as futures contracts, which are agreements to buy or sell an asset at a set date.

The current Brent futures contract for June delivery expired on Thursday, which contributed to its drop, said Naveen Das, senior oil analyst at Kpler. The more active July contract was trading lower at around $110 a barrel.

Crude oil is a key ingredient in petrol and diesel, and the jump in costs since the start of the Iran war has pushed up pump prices for motorists. In Nigeria, a litre of petrol currently costs about N1,400 per litre, up from roughly N800 that it sold before the war started on February 28. That is approximately a 75 per cent rise.

Also, in the UK, petrol currently costs an average of 157p a litre, according to motoring group RAC, quoted by BBC, which is 24p higher than before the start of the war. Diesel is at 188.5p a litre, up 46p compared with its pre-war price.

The UK government has warned people could face higher energy, food and flight ticket prices as a result of the war. Some airlines have already started to raise fares or reduce flights. Fertiliser prices have also started to increase, which could have a knock-on effect on food prices.

But the Axios report cited anonymous sources, saying the proposed wave of strikes would be likely to include infrastructure targets. Another plan focused on taking over part of the Strait of Hormuz so that it can be reopened for commercial shipping, Axios reported, adding that doing so could involve troops on the ground.

Meanwhile, a statement attributed to Iran’s Supreme Leader Mojtaba Khamanei said that Tehran would secure the Strait of Hormuz and eliminate “the enemy’s abuses of the waterway”.

Khamanei’s statement on Thursday also said a “new chapter” for the region had been taking shape since the start of the US-Israeli war with Iran on 28 February.