Price of oil hits $116 a barrel after Trump says he wants to ‘take the oil in Iran’

Oil Prices Surge Past $116 as Trump's Threats Intensify

Oil prices surged past $116 a barrel on Monday after President Donald Trump said he wanted to 'take the oil in Iran,' according to multiple reports from The Guardian. Brent crude, the international benchmark, rose by 2% in early trading, with prices climbing sharply following Trump's comments in an interview with the Financial Times over the weekend. In the interview, Trump said, "To be honest with you, my favourite thing is to take the oil in Iran, but some stupid people back in the US say: 'why are you doing that?' But they're stupid people." He also suggested seizing the Iranian export hub of Kharg Island, adding, "Maybe we take Kharg Island, maybe we don't. We have a lot of options."

Earlier in the week, oil had already traded at more than $110 a barrel following Trump's remarks that all of Iran could be "taken out" in one night. According to reports from Tuesday, Brent crude rose 1% to $111 a barrel, while New York light crude rose 2.6% to $115.3 a barrel. A day later, Brent had climbed to $116 as the market absorbed the president's escalating rhetoric. The Guardian's coverage highlights that Trump set a deadline of Tuesday 8pm ET for Iran to agree to a deal with Washington or face fresh attacks, saying, "The entire country can be taken out in one night, and that night might be tomorrow night."

Market Reaction and Global Impact

Asian stock markets dropped sharply following the latest rally in oil prices. On Monday, Japan's Nikkei dropped by 3%, the South Korean Kospi fell 3.4%, and Hong Kong's Hang Seng shed about 1%. European markets were mixed, but the UK's FTSE 100 dipped in early trading, according to Guardian reports.

Investors have been on edge since the US-Israel attack on Iran in February, which effectively closed the Strait of Hormuz—a crucial waterway through which about a fifth of the world's oil and gas supplies normally flow. The ongoing conflict, now with Houthi rebels in Yemen entering the fray with missile attacks on Israeli targets, has stoked fears of a wider war. Deutsche Bank analysts wrote in a note to investors, "There's still no sign of a clear end to the conflict, and given the various headlines, investors remain fearful about a fresh escalation."

The price surge has been dramatic; Brent crude is on track for its biggest monthly gain ever, up more than 50% since the start of March, surpassing the previous record of 46% in September 1990 after Saddam Hussein invaded Kuwait.

Key Claims and Discrepancies

Oil price movements: Reporters from The Guardian presented slightly varying figures across different days, reflecting the fast-moving nature of the market. On Tuesday, Brent crude was reported to have risen 1% to $111 a barrel, while on Monday it was reported up 2% to $116 a barrel. These numbers appear to capture sequential moments; the price on Tuesday was lower than Monday's close, though still above $110.

US energy independence: A separate Guardian analysis challenges President Trump's assertion that the US is "totally independent" of the Middle East. While the US is indeed a net exporter of oil, the article notes that the US still imports millions of barrels per day, and oil prices globally are set by the international market. Notably, the piece quotes an analyst who compares the oil market to "a giant swimming pool," where price changes spread across regions.

Impact on consumers: The same analysis pointed out that US gasoline prices have breached $4 per gallon at the national average, and global fertilizer costs have risen sharply, which could affect worldwide food prices.

Qatar helium output: Another article highlighted that Qatar halted helium output, a further sign of the conflict's disruptions beyond oil and gas.

Market caution: The Guardian points out that the US and its allies have their own concerns, with Keir Starmer reportedly meeting with energy company executives and shipping industry leaders to discuss emergency measures.

Perspectives

From a simple perspective, the oil price surge and market reaction have been driven directly by President Trump's threats. The White House's position, as relayed by Trump, is that the US is a \"No 1 producer of oil and gas\"; he has said countries should "go get your own oil,\" downplaying the risk to the US. However, analysts like Clark Williams-Derry of the Institute for Energy Economics and Financial Analysis tell The Guardian that the oil markets are global and interconnected, and even if the US is more energy independent than for gas, the impact of disruption in the Gulf will inevitably hit US consumers and the economy.

Outlook: \"All Roads Lead to Higher Prices\"

Kristalina Georgieva, head of the IMF, told Reuters that the war is likely to lead to higher inflation and slower global growth. The IMF had previously expected a small upgrade to global growth, but \"all roads now lead to higher prices and slower growth.\" Market analysts survey by The Guardian note that despite the sharp moves, a clear end to the conflict is not in sight, and expectations are for continued volatility.

As the situation develops, the interplay between geopolitical rhetoric and energy markets will remain a key theme to watch. The world now is perhaps more aware than ever that oil prices are beyond the command of any single nation.