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Oil prices surged Wednesday as President Donald Trump warned Iran to reach a deal and reopen the Strait of Hormuz, keeping energy markets locked on the risk of a prolonged supply shock.
WTI crude climbed back above $100, trading near $105 at press time and up more than 6% on the day, while Brent crude rose roughly 5% and traded above $110, as traders priced in the risk of extended disruptions tied to the US Iran conflict.
Trump issued a new warning to Tehran early Wednesday, telling the regime to get smart soon and accept US demands for tighter controls on its nuclear program.
The warning comes as talks remain stalled over Iran’s nuclear program and the reopening of the Strait of Hormuz, one of the world’s most important energy shipping routes. Reuters reported that prices rose after reports that the US could extend its blockade of Iranian ports, while WSJ reported that Trump had told aides to prepare for a longer pressure campaign.
The escalation also widened beyond Hormuz. A senior Iranian lawmaker renewed a threat that Tehran could ask Houthi allies in Yemen to disrupt the Bab el Mandeb strait if the US continues intercepting Iranian ships, raising the risk of pressure across another key Middle Eastern energy chokepoint.
Defense Secretary Pete Hegseth faced lawmakers Wednesday for the first time since the Trump administration launched its joint war with Israel against Iran. The hearing, originally focused on the Pentagon’s proposed $1.5 trillion 2027 budget, quickly turned into a fight over the war’s cost, strategy, and lack of congressional approval.
Democrats accused the White House of entering an unnecessary conflict without authorization from Congress, while Hegseth defended the administration’s handling of the war. AP reported that Pentagon officials put the estimated cost of the conflict at about $25 billion so far, mainly tied to munitions and operations.