US oil settles above $100 for first time since 2022 after Trump says he wants to ‘take the oil’ in Iran and Houthis join war

By Hanna Ziady, John Towfighi, CNN

London/New York (CNN) — Oil prices rose Monday, with US crude oil settling above $100 per barrel for the first time since July 2022, after comments by President Donald Trump and strikes against Israel by Iran-backed Houthi rebels deepened fears that the Middle East conflict may escalate further.

WTI, the US benchmark, rose 3.25% to settle at $102.88, its highest closing level since July 2022. Brent crude, the global oil benchmark, rose 0.19% to settle at $112.78 per barrel, paring gains after surpassing $116 per barrel earlier. It was still Brent’s highest settle since July 2022.

US crude oil settled above $100 per barrel as the war with Iran enters its fifth week. Traders continue to grapple with concerns that the conflict could carry on without a clear end in sight, creating prolonged disruptions in global oil markets.

Trump told the Financial Times in an interview published Sunday that he wants to “take the oil in Iran” and could seize Kharg Island, which handles about 90% of the country’s oil exports. He compared the potential move to US operations in Venezuela, according to the FT, where the United States intends to control the oil industry “indefinitely” following its capture of authoritarian leader Nicolás Maduro in January.

In a Truth Social post on Monday morning, Trump said the United States would blow up Iranian electric plants, oil wells and Kharg Island unless a deal is reached and the Strait of Hormuz is “immediately” reopened.

Adding to fears about a ramp-up in the fighting, Iran-backed Houthi militants in Yemen joined the conflict over the weekend, launching strikes against Israel Saturday. The rebels could close the Bab al-Mandeb Strait, a chokepoint linking the Red Sea to global shipping lines.

Meanwhile, the United States has sent thousands of troops to the Middle East over the past week, and Mohammad Bagher Ghalibaf, Iran’s parliamentary speaker, on Sunday accused the United States of “secretly planning a ground invasion” while touting negotiations. He also said Tehran’s forces are “waiting” for US troops.

Oil prices have surged more than 50% so far in March following the US-Israeli war against Iran. Brent had traded around $73 a barrel before the United States and Israel attacked Iran on February 28, prompting Tehran to choke off the Strait of Hormuz, which ordinarily carries around a fifth of global oil supply.

Brent is up almost 55% this month and on pace for its biggest monthly gain on FactSet records going back to 1989. WTI is up 53.5% this month and set for its best month since May 2020.

Despite signs of the conflict intensifying, Trump told reporters aboard Air Force One Sunday that the US was having “very good” negotiations with Iran, adding that Tehran had agreed to “most of” Washington’s 15-point list of demands to end the war. Iranian officials have previously expressed skepticism of the plan, which is believed to include a commitment to not developing nuclear weapons, handing over Iran’s highly enriched uranium and reopening the Strait of Hormuz.

Foreign ministers from Pakistan, Saudi Arabia, Egypt and Turkey are also working to bring the war to an end. The officials gathered Sunday in what was described as a “very productive” meeting, according to Pakistan’s Foreign Minister Ishaq Dar. He added that Pakistan will facilitate talks between the United States and Iran in the “coming days.”

$200 oil, $7 gasoline if war drags on

Investors, however, are growing increasingly nervous.

“There’s still no sign of a clear end to the conflict, and given the various headlines, investors remain fearful about a fresh escalation,” Jim Reid, head of global macroeconomic research at Deutsche Bank, wrote in a note Monday. According to Reid, “the market impact is becoming increasingly serious,” as “investors price in a more protracted conflict.”

He noted that the S&P 500 has now fallen for five consecutive weeks, its longest losing streak since 2022, when the global economy was facing a similar risk of higher inflation and lower economic growth.

On Monday, Asian markets closed down with heavy selling in Seoul and Tokyo. European markets were mostly higher. US stocks closed mostly lower: The S&P 500 and Nasdaq fell 0.39% and 0.73%, respectively, erasing gains after opening higher. The Dow closed higher by 50 points, or 0.11%, after briefly dipping into the red.

“With the Iranian regime still in place and holding de-facto control over the Strait of Hormuz, global energy inventories falling and enriched uranium still inside the country, the path to a negotiated settlement acceptable to all sides currently appears limited,” Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management, said in a note.

Brent crude oil could reach $200 a barrel if the war continues until the end of June, equating to a US gasoline price of $7 per gallon, analysts at Macquarie Group wrote in a note Friday. If the Strait of Hormuz were to remain shut until the end of June, given its importance to oil supply, prices would need to move high enough for global demand for oil to fall, the analysts wrote. They put the likelihood of this outcome at 40%.

In a different scenario, assigned a probability of 60%, the conflict ceases at the end of this month and oil prices fall quickly. Still, prices remain above those seen before the war, returning to “the low $80s next year,” the Macquarie analysts said.

“If the war begins to wind down soon, the economic costs will likely be relatively small, with global (economic) growth to slow only a little relative to last year,” they added.

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