Oil prices dipped after an initial gain at market open on Sunday after the US and Iran traded threats over the weekend.
Loading audio narration…
Brent crude fell to about $111, after briefly reaching almost $114, down from $112.19 on Friday. West Texas Intermediate hovered around $98.
The price of a barrel of oil was a more manageable $70 before the US and Israel began bombing Iran on February 28.
As the conflict entered its fourth week, President Donald Trump on Saturday said the US would attack Iran’s power plants, starting with the “biggest one,” if it didn’t reopen the Strait of Hormuz within 48 hours.
Iran responded on Sunday, threatening to strike infrastructure belonging to the US and Israel across the Middle East.
“If Iran’s fuel and energy infrastructure is attacked by the enemy, all infrastructure of energy, information technology, and desalination facilities belonging to the US and the (Zionist) regime in the region will be targeted,” Ebrahim Zolfaqari, a spokesperson for Iran’s military command, said in a statement posted online.
The Strait of Hormuz is a narrow waterway off the Iranian coast through which 20% of the world’s oil supply and liquefied natural gas must pass. Iran has attacked ships it believes are connected to the US and Israel, while allowing some others safe passage.
The near closure of the Strait is the primary catalyst for rising oil prices. Iran’s control of the Strait has frustrated Trump, who won the 2024 election in part on a promise to lower prices for Americans.
The national average price of gas is now close to surpassing $4 a gallon in the United States. The war, coupled with Trump’s tariff policies, has pushed up the price of a wide range of goods in the US, ending any hope that the Federal Reserve might cut interest rates anytime soon.
Beyond oil, the conflict has disrupted the flows of other critical materials and commodities, including helium, pharmaceuticals, and fertilizer.
