Oil prices surge following Trump Iranian infrastructure threat
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Global energy markets have been jolted by a fresh wave of volatility on April 6, as oil and diesel prices surged following an escalatory, expletive-laden social media post from US President Donald Trump.
Trump’s explicit threat to neutralise Iranian power plants and critical infrastructure has reignited fears of a protracted energy crisis, sending Brent Crude futures for May climbing 2.1% to US$114.37 a barrel, while West Texas Intermediate followed suit at $US111.12.
The impact was even more pronounced in the distillate market. London Gas Oil futures, the international benchmark for diesel, spiked 5.7% to US$1,567 per metric tonne—marking its highest peak since hostilities commenced.
This represents a staggering 108% increase since the pre-conflict close of US$752 on Feb. 26.
Tensions have intensified as Trump suggested the military engagement could persist for several weeks unless Iran capitulates to demands regarding the reopening of the Strait of Hormuz.
While some shipping data indicates Iran is permitting passage for select nations, including China, Russia, and India, overall traffic remains decimated. Ryan Sweet, chief global economist at Oxford Economics, noted that tanker volume through the Strait has plummeted by 98 per cent compared to pre-war levels.
Economists warn that a prolonged timeline could see supply disruptions reach 7.5 million barrels per day, threatening further inflationary pressure.
Amidst the uncertainty, the Australian dollar edged down to US$68.9 cents, while local equity markets remained shuttered for the Easter Monday public holiday.