Market "calm before the storm": Trump issues "destroy" warning to Iran, oil prices stabilize at high levels.

Despite President Donald Trump escalating threats against Iran, claiming that the country's key infrastructure will be destroyed if an agreement is not reached by the deadline on Tuesday, international oil prices have remained steady near their recent highs, reflecting the market's cautious stance as it awaits the final outcome of the situation. On Tuesday, Brent crude prices, after rising 0.7% in the previous trading day, remained around $110 per barrel; WTI crude also fluctuated around $113 per barrel after reaching its highest closing price since June 2022. Trump stated on Monday that negotiations with Iran were "progressing well," and he has reopened the issue of the Strait of Hormuz as a "very important priority." Trump made it clear that if Iran does not reach an agreement by 8 p.m. Eastern Time on Tuesday, they will face serious consequences. He stated that the U.S. military could "destroy all the bridges in Iran by tomorrow night at 12 o'clock." He also said that power plants would be "burned, exploded, and never be able to be used again," which would violate the Geneva Conventions. As Trump's threats escalate, the WTI crude oil futures price differential widens. Iran has issued a warning that if attacked in this manner, they will increase attacks on energy infrastructure in the Persian Gulf a move that could exacerbate the global fuel supply tightness and further damage the global economy. This six-week-long war has disrupted the oil market, causing severe supply shocks. Enverus oil and gas analyst Carl Larry stated, "There is no sign of easing in the situation with Iran. Perhaps we are approaching a turning point, but if it ultimately evolves into military action, it may not be the best outcome." As the war continues, concerns about recent oil supply have increased. On Monday, the spot price differential of WTI crude oil (the price difference between the two nearest contracts) briefly approached $15.50 per barrel, nearing historical highs. The widening differential is due to overseas buyers rushing to purchase U.S. crude, as market expectations of tight U.S. supply continue to rise. As of writing, Brent crude futures for June delivery fell by 0.15% to $109.52 per barrel, while WTI crude futures for May delivery rose by 0.54% to $113.02 per barrel.