Crude Oil Soars As An End To The Gulf War Is Nowhere In Sight

(RTTNews) - After pulling back sharply early in the session, crude oil prices have shown a substantial move back to the upside over the course of the trading day on Friday.

With the turnaround, crude oil is extending the spike seen over the past two days as traders assess U.S. President Donald Trump's claims of Iran's surrender sometime soon in comparison to yesterday's assertion by the new leader of Iran wherein he confirmed plans to continue blocking the Strait of Hormuz.

WTI Crude Oil for April delivery was last seen trading up by $3.35 (or 3.50%) at $98.08 per barrel after plunging as much as 3.9 percent to a low of $92.04 a barrel.

Axios reported that during a virtual meeting with the Group of Seven (G7) leaders on Wednesday to discuss the implications of the ongoing U.S.-Israel was versus Iran, Trump had claimed that Iran is about to surrender soon.

Trump had also added that nobody could announce Iran's surrender as none knows who is their leader.

Boasting about the results of Operation Epic Fury, Trump had stated that he got rid of a "cancer" that was threatening everyone.

In an interview with Fox News Radio, Trump also stated that the U.S. will be hitting Iran hard over the next week.

Despite Trump's claims, uncertainty prevails about the timeline for ending the war.

Yesterday in his first message to Iranians, (read out by a TV anchor), Iran's "incumbent" Supreme Leader Mojtaba Khamenei vowed to avenge the Iranian martyrs and reaffirmed that Iran will fight back with "full force."

Khamenei also stressed that the Strait of Hormuz will remain closed as a ploy to keep pressure on "Iran's enemies."

Khamenei thanked the "Resistance Forces," including Lebanon's Hezbollah and Yemen's Houthi militia group for their support.

Market participants interpreted Khamenei's address as an indication that the war could drag on for more days and more fiercely.

Since it began on February 28, the war has blocked oil and energy transit through the Strait of Hormuz

The export of oil from Arab nations to other parts of the world stands heavily disrupted. Storage constraints have forced many of them to halt production for now.

According to the International Energy Agency, countries including Saudi Arabia, the United Arab Emirates and Iraq that depend on this naval corridor have halted nearly 8 million barrels per day of crude production and a further 2 million of condensate and natural gas liquids.

Consequently, inflationary concerns have been accelerating across the globe. Economists predict that several global major banks would hold back on any rate cuts in the near-term.

The U.S. dollar index was last seen trading at 100.37, up by 0.71 points (or 0.71%) today.

In an effort to stabilize energy trade, yesterday the U.S. Treasury Department announced a one-month waiver on the U.S.-imposed sanctions on Russian oil (around 100 million barrels) that is already loaded and stranded at sea.

To balance the supply shocks, the global energy watchdog International Energy Agency pledged to release nearly 400 million barrels from the oil reserves of its respective member-nations. However, the IEA has not clearly defined any timeline for the release.

The U.S. has confirmed it will release 172 million barrels for its part.

A majority of shipping insurers have cancelled war coverage for tankers passing through the strait.

U.S. Treasury Secretary Scott Bessent called for an international coalition to safely escort tankers via the Strait of Hormuz.

Today, the U.S. Personal Consumption Expenditure data released by the Bureau of Economic Analysis revealed that the core price index rose by 0.4% from January. Compared to the previous year, the core PCE index rose by 3.1%.