Oil surges to highest since mid-2022 as Trump weighs Iran military action

Oil extended gains Thursday as a report suggested the U.S. military would brief President Donald Trump on potential action against Iran, raising worries that armed conflict could resume, building on the American blockade of Iranian exports. Axios reported Thursday that the U.S. Central Command was set to present Trump plans for potential military action in Iran, citing two sources with knowledge of the matter. Trump had earlier reportedly rejected Tehran's proposal to reopen the Strait of Hormuz, signaling the naval blockade will remain in place until a broader nuclear agreement is reached. June futures for international benchmark Brent crude rose more than 3% to $121.65 a barrel, while U.S. West Texas Intermediate added 2% to $109.03. Brent crude had risen about 6% on Wednesday and WTI gained 7%, as The Wall Street Journal reported, citing U.S. officials, that Trump had instructed aides to prepare for an extended blockade of Iran. Trump appeared to threaten Iran in a Truth Social post on Wednesday, saying the country "better get smart soon!" "Iran can't get their act together. They don't know how to sign a nonnuclear deal. They better get smart soon!" Trump said. The post was accompanied by an AI-generated picture of Trump holding a gun with explosions in the background, and the words "NO MORE MR. NICE GUY!" Brent crude has surged to its highest levels since mid-2022, LSEG data shows, as the Middle East conflict chokes supplies. Goldman Sachs estimates that exports through the Hormuz chokepoint have fallen to just 4% of normal levels, while stalled U.S.-Iran negotiations and a continued U.S. blockade tightening supplies. Constrained Iranian exports and limited storage capacity could deepen supply disruptions if the blockade persists, the bank's analysts said, adding that boost to output from the UAE following its OPEC exit is likely to materialize more gradually over the medium term rather than offsetting near-term tightness. However, the bank flagged emerging downside risks to demand, noting global oil consumption in April may be about 3.6 million barrels per day lower than February levels, with weakness concentrated in jet fuel and petrochemical feedstocks. — CNBC's Holly Ellyatt contributed to this report.