Key Points:
- President Donald Trump threatened to obliterate Iranian power plants if the Strait of Hormuz remains closed.
- Iran promised to attack US-linked energy and water facilities across the Gulf in retaliation.
- Brent crude oil closed at $112.19 a barrel on Friday, reaching its highest level since July 2022.
- The ongoing war has already blocked roughly 440 million barrels of oil from the global market.
Global oil markets are bracing for a massive shock when trading opens on Monday. Energy analysts predict prices will shoot up following a weekend of aggressive threats between the United States and Iran. The tension escalated sharply after President Donald Trump issued a strict 48-hour ultimatum to Tehran, demanding the immediate reopening of the critical Strait of Hormuz.
The situation took a dark turn on Saturday when Trump threatened to “obliterate” Iranian power plants if the country refused to comply. This harsh warning surprised many observers, especially because the President had talked about “winding down” the four-week-old war just a day earlier. Iran quickly fired back on Sunday. Iranian officials warned they would launch devastating attacks on US-linked infrastructure, specifically targeting vulnerable energy and water desalination facilities throughout the Gulf region.
These threats are already pushing oil prices toward historic highs. On Friday, Brent crude futures jumped 3.26% to settle at $112.19 a barrel. This marks the highest closing price for the global benchmark since July 2022. For the entire week, Brent crude gained about 8.8%. Meanwhile, the US benchmark, West Texas Intermediate, fell slightly by 0.4% from the previous week, creating the widest price gap between the two types of oil in 11 years.
Market experts are sounding the alarm. Tony Sycamore, an analyst at IG, stated that Trump’s threat essentially placed a “48-hour ticking time bomb” of extreme uncertainty over the financial markets. He warned that if the President does not walk back his ultimatum, oil prices will undoubtedly spike on Monday morning. Amrita Sen, founder of Energy Aspects, echoed this concern. She noted that Trump is trying to prove he can out-escalate Iran, a strategy she fears will end in scorched earth for vital Gulf infrastructure.
The physical damage from this war is already staggering. Over the past 22 days, Iranian forces have attacked ports and refineries across Saudi Arabia, Kuwait, Bahrain, the UAE, and Qatar. These retaliatory strikes, combined with the closure of the Strait of Hormuz, have effectively choked off the global supply chain. Experts estimate the blockade has cost the world roughly 440 million barrels of oil, which equals a full 4 days of total global consumption.
The most terrifying aspect of Iran’s latest threat involves water. So far, Tehran has avoided striking the massive desalination plants in Saudi Arabia and the UAE. These complex facilities extract salt from seawater and are entirely responsible for keeping millions of people alive in the harsh desert environment. The Atlantic Council warns that large-scale damage to these water plants could make several major Gulf cities completely uninhabitable within weeks, triggering mass civilian evacuations and cascading power grid failures.
Even if the fighting stops today, the energy market faces a long, painful recovery. Fatih Birol, the chief of the International Energy Agency, told the Financial Times on Friday that restoring normal oil supplies from the Middle East Gulf could take up to 6 months.
Behind the scenes, the Trump administration is reportedly exploring extreme military options to force Iran’s hand. According to a Friday report from Axios, US officials are actively considering plans to physically occupy or blockade Kharg Island, Iran’s most important oil export terminal, to pressure the regime into reopening the Strait of Hormuz.
