Oil Jumps Above $90 as Trump Promises Iran ‘a Beating’

• Saudi joins strikes against Iran-backed militia

Emmanuel Addeh in Abuja

Oil prices climbed above $90 a barrel yesterday after Saudi Arabia joined the United States in launching airstrikes against Iran-backed groups in Iraq, heightening fears of a wider conflict in the Middle East and raising fresh concerns over global crude supply.

Brent crude, Nigeria’s benchmark, surged more than 7 per cent to trade at $90.25 per barrel, while the US West Texas Intermediate (WTI) crude rose 6.8 per cent to $84.65 per barrel, extending gains as tensions escalated across the region.

The latest rally followed coordinated US-Saudi military strikes against Iranian-backed militias in Iraq after Washington accused the groups of carrying out drone attacks on Saudi oil facilities. The attacks came shortly after the US military said it had thwarted what it described as a surprise Iranian missile attack targeting American troops in the Middle East.

The market reaction intensified after US President Donald Trump vowed a forceful response to Tehran’s latest actions.

“We’ll be hitting them hard. They’re going to get a beating,” the US president told Fox News as he responded to the latest attacks on American forces.

The US military announced on Tuesday night that it intercepted Iran’s latest “surprise attack” by the Islamic Revolutionary Guard Corps after Trump’s meeting with Israeli Prime Minister Benjamin Netanyahu.

CENTCOM later disclosed that the Saudi Arabian Armed Forces assisted the US military in a separate operation after Iran-aligned groups launched more than 30 drone attacks in the previous 72 hours. Saudi Arabia also joined US strikes on Iran-backed groups in Iraq on Wednesday, with at least 20 fighters reported killed.

The renewed hostilities have again placed the Strait of Hormuz, through which roughly one-fifth of the world’s seaborne oil passes, at the centre of market concerns. Iran rejected Oman’s proposal for joint regional management of the strategic waterway, while maintaining its determination to exert greater control over shipping through the strait.

China has meanwhile held direct talks with Yemen’s Houthi movement to secure safe passage for its tankers through the southern Red Sea after the Iran-aligned militia declared a blockade of Saudi ports. According to sources, Beijing was among the first countries to engage the Houthis directly over transit through the Bab el-Mandeb Strait.

The US also announced another round of Iran-related sanctions targeting eight tankers and 10 entities.

Announcing the measures, US Treasury Secretary Scott Bessent said: “With its economy in freefall and inflation in the triple digits, the regime is desperate for cash.

“The United States will not allow Iran to hold global commerce hostage or use international shipping to finance the IRGC’s terrorism, aggression, and repression.”

UBS analyst Giovanni Staunovo said renewed military action, coupled with Iran’s insistence on tightening its grip over shipping through the Strait of Hormuz while oil flows remain depressed, had fuelled the latest jump in prices.

Analysts at DBS Bank said Brent crude was likely to remain highly volatile, forecasting prices would swing between $80 and $100 per barrel as the conflict evolves.

Shipping activity through the Strait of Hormuz remained significantly below normal levels, reflecting persistent security concerns. Although vessel traffic through the Bab el-Mandeb Strait, an alternative route for Saudi oil exports to Asia, has shown modest improvement, analysts said disruptions in Hormuz continue to pose a much greater threat to global energy supplies.

Energy analyst Scott Shelton of TP ICAP said the Houthis had been less successful in disrupting shipping through the Bab el-Mandeb than Iran had been in restricting movements through the Strait of Hormuz.

Further supporting prices, fresh data from the US Energy Information Administration (EIA) showed that American crude inventories fell by 7.2 million barrels last week to 404.5 million barrels, their lowest level since 2018. The decline, far exceeding analysts’ expectations for a 1.3 million-barrel draw, pointed to robust exports and resilient domestic demand.

The bullish sentiment was reinforced by expectations that OPEC+ could suspend planned oil production increases for three months beginning in October after completing the current schedule for restoring previously withheld output.

The combination of escalating geopolitical risks, tightening crude inventories and expectations of restrained OPEC+ supply has strengthened the outlook for higher oil prices, although analysts cautioned that the market would remain highly volatile as developments in the Middle East continue to unfold.