Iran’s Islamic Revolutionary Guard Corps (IRGC) has threatened to completely shut the Strait of Hormuz if US President Donald Trump follows through on threats to target Iranian energy facilities, according to a Guardian report cited by FXStreet [1]. Trump has given Iran 48 hours to reopen the strait to shipping or face the destruction of its energy infrastructure [1]. An Iranian source told CNN that Tehran is moving forward with monetizing control of the critical waterway [1]. Following these headlines, crude oil prices edged higher, with West Texas Intermediate (WTI) up 0.24% on the day at $97.35 [1].
Meanwhile, in a televised debate, Treasury Secretary Scott Bessent discussed the effects of the ongoing war with Iran on oil prices, noting that gas prices have skyrocketed since the conflict began [2]. NBC's Kristen Welker questioned Bessent about the Treasury Department's decision to lift sanctions on Iranian oil stored on tankers, which, according to Welker, could allow Iran to gain more than $14 billion in oil revenue [2]. Bessent disputed this framing, explaining that the Iranian oil was always destined for sale to China at a discount, and argued that keeping oil prices below $100 is preferable to a spike to $150, which would benefit Iran more [2]. Bessent stated that about 140 million barrels of Iranian oil are currently on the water, which equates to between 10 days and two weeks of global supply, given that roughly 20 million barrels per day come out of the Gulf, with 5 million repurposed by Saudi Arabia and the UAE [2].
Bessent further explained that the current supply situation, including Russian and Iranian oil and the largest Strategic Petroleum Reserve (SPR) release in history by a coalition of 32 countries totaling 400 million barrels, has helped keep WTI prices below $100 and prevented a massive spike similar to the early days of the Russia-Ukraine conflict [2]. He also addressed concerns about easing sanctions on Russia, stating that the maximum extra revenue Russia could gain would be $2 billion, equivalent to one day of the Russian Federation's budget [2].
The threat to close the Strait of Hormuz, a critical chokepoint for global oil shipments, combined with the ongoing debate over sanctions and oil supply, has heightened market uncertainty and contributed to upward pressure on crude prices [1][2].
CONCLUSION
The escalating tensions between Iran and the US, including threats to close the Strait of Hormuz, have pushed oil prices higher and increased market volatility. Treasury Secretary Bessent emphasized that global oil supplies remain robust, helping to keep prices below $100 despite the conflict. However, the situation remains fluid, and any disruption to the Strait could have significant market consequences.