WTI at 4-Yr High on Iran Attacks Ahead of Trump Deadline

VIENNA (DTN) – Crude futures extended their rally Tuesday (4/7) morning, driving NYMEX WTI to four-year highs, amid fresh attacks on Iran’s infrastructure hours before the expiry of U.S. President Donald Trump’s ultimatum to reopen the Strait of Hormuz.

Trump had threatened to destroy Iranian powerplants and oil assets should the blockade of the waterway, that carries a fifth of world petroleum cargoes, not end until 8pm ET today.

“A whole civilization will die tonight, never to be brought back again,” Trump wrote on his Truth Social media platform. “I don’t want that to happen, but it probably will.”

He, however, expressed hope that with Iran having “different, smarter and less radicalized minds”, following the deaths of many of its previous leaders, “something revolutionarily wonderful can happen.” Trump originally issued his ultimatum to Iran, which has been postponed twice, on March 21.

Tehran, over the weekend, rejected a proposed 48-hour ceasefire, seeking a permanent end to the war.

By 08:45 am ET, WTI for May delivery was up $2.95 to trade at $115.36 bbl, after a four-year high at $116.56. ICE Brent for June delivery rose $0.92 to $110.69 bbl.

WTI’s premium against Brent, now at around $5 bbl, is at its steepest in 18 years. The spread between front-month May WTI and the immediate subsequent month, June, is at a record high above $15.5 bbl on near-term supply concerns and increased demand for U.S. crude amid the oil supply crisis.

RBOB futures for May delivery advanced by $0.0328 to $3.3410 gallon, while front-month ULSD futures added $0.1698 to trade at $4.4982 gallon.

The US dollar index softened by 0.059 points to 99.745 against a basket of foreign currencies.

Dozens of infrastructure sites across Iran were hit in Israeli raids early Tuesday. Iranian media also reported explosions on Kharg Island, a key oil loading and storage hub through which 90% of the country’s oil exports are handled. The reports did not specify the cause of the explosions or extent of damage.

Tanker traffic through the Strait of Hormuz, the passageway for a fifth of global petroleum liquid supply, has been all but idle since the U.S. and Israel launched attacks on Iran on February 28. The International Energy Agency said that the resulting energy supply disruption, which has been ongoing for more than six weeks, was the largest in history. Fatih Birol, the IEA’s head, said that the crisis was “more serious than the ones in 1973, 1979 and 2022 together”.