Brent briefly tops $95 as Trump threatens to hit Iranian bridges and power plants

Oil prices rose more than 3% on Wednesday, with the global crude benchmark briefly climbing above $95 a barrel for the first time since June 11. Supply disruption concerns swept markets amid continued fighting between the U.S. and Iran and threats to multiple shipping corridors in the Gulf. 

Additionally, government data showed U.S. crude oil inventories, including commercial and emergency stocks, fell for a fifteenth straight week.  

At 15:00 ET (19:00 GMT), Brent crude futures expiring in September were up 3.6% to $94.32 a barrel, while U.S. West Texas Intermediate crude futures expiring in September gained 3.3% to $87.14 a barrel. The former has soared more than 29% this month, while the latter has surged nearly 26%. 

U.S. to strike an Iranian bridge or power plant for every ship attack 

The U.S. and Iran have engaged in tit-for-tat strikes for eleven consecutive days, as an effective ceasefire and other diplomatic terms both sides agreed to in mid-June has all but collapsed.

"From this point forward, any time the Islamic Republic of Iran shoots at a ship in the Strait of Hormuz, whether it be by Missile, Rocket, Drone, or any other device or weapon, the United States will bomb and destroy ONE BRIDGE OR POWER PLANT, including those located next to, or in, the Capital City of Tehran," President Donald Trump said on his Truth Social service in the morning.

The statement drew an immediate response from Tehran. Iran’s Tasnim News Agency, citing a military source, said the country would target regional infrastructure and energy facilities with American interests if any bridges or power plants were struck. Separately, Iran’s foreign minister Abbas Araghchi said any aggression against infrastructure would be met with a "powerful and decisive response." 

"They’re going to pay a big price. They’re getting, they’re being decimated," Trump later told reporters before departing for a U.S. Air Force base for the transfer of four service members killed in action in recent days. 

Iran’s state media previously reported that the U.S. has already targeted bridges in their eleven-day bombardment campaign.

Shipping traffic declines, Iran says ’no one will sell’ oil 

The continued fighting has led to a significant drop in vessel traffic through the Strait of Hormuz. New threats to another vital shipping corridor, the Bob el-Mandeb Strait, from Iran-backed Houthis in Yemen have exacerbated supply disruption concerns. 

"(Houthi attacks) would force tankers to enter and exit the Red Sea via the Suez Canal, adding significant time and expense to voyages to Asia," analysts at ING said.

"Factoring in the renewed disruptions from the Persian Gulf, risks to Saudi crude exports from the Red Sea, and developments in the Black Sea, one may argue that Brent at just over $91 a barrel is undervalued. Particularly if these disruptions persist into August," they added.

According to Kpler data, traffic through both chokepoints slumped on Tuesday, with Hormuz crossings down 31% from the previous day to nine vessels and el-Mandeb down 34% to 29.

"Four confirmed vessel U turns near the Gulf of Aden suggest operators are becoming more cautious following Houthi threats against Saudi linked shipping. At the same time, confirmed maritime attacks continue around the Strait of Hormuz, reinforcing concerns that uncertainty across both regional chokepoints could reshape routing decisions, increase freight costs and sustain higher geopolitical risk premiums for energy markets," the shipping tracker said.

Meanwhile, the speaker of the parliament and Iran’s top negotiator, Mohammad Bagher Ghalibaf, asserted that the strait would not return to pre-war conditions. 

"The equation of this war is clear: either all or none! In a region where we do not sell oil, no one will sell oil. If our security is not ensured, no infrastructure will be safe, and the security of the strait is in the absence of American forces," he said. 

Washington says Iran not ’serious’ about negotiations

Oil market participants had taken some hope this week from media reports that said mediators were continuing to attempt to revive a diplomatic solution. Iranian Interior Minister Eskandar Momeni was said to have visited with Pakistani mediators this week. According to a senior Iranian official quoted by Reuters, Iran has received a proposal from mediators for a 10-day ceasefire, in a push to rescue a framework deal to halt hostilities which the U.S. and Iran signed in June.