(Bloomberg) — President Donald Trump said he was sticking with a naval blockade of Iranian ports even as oil prices hit a wartime high amid concerns the vital Strait of Hormuz would not reopen anytime soon.<\/p>\n
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\u201cTheir economy is crashing, the blockade is incredible,\u201d Trump told reporters at the White House. \u201cTheir economy is a disaster. So we\u2019ll see how long they hold out.\u201d<\/p>\n
Oil prices steadied after surging earlier in the day with little sign that Washington and Tehran were moving closer to a deal, with the US doubling down on a blockade and strident new comments from Iran\u2019s new leader.<\/p>\n
Brent futures initially rose to $126 a barrel \u2014 their highest level since the conflict began \u2014 before easing to $114. Prices are up more than 8% this week.<\/p>\n
Traders are factoring in the possibility of a return to hostilities and a prolonged shutdown of the strait, which is crucial for global oil and gas flows but has been effectively shut since the US and Israel started the war on Feb. 28.<\/p>\n
Pump prices across parts of the US are also rising sharply, with the national average at fresh highs and retail gasoline in California skyrocketing above $6 a gallon. That\u2019s increasingly becoming a concern for Trump\u2019s Republican party heading into the midterm elections.<\/p>\n
\u201cThe gas will go down,\u201d Trump said. \u201cAs soon as the war is over, it\u2019ll drop like a rock.\u201d<\/p>\n
Earlier on Thursday, Iran\u2019s new supreme leader Mojtaba Khamenei also cast doubt on the likelihood of a deal, giving a rare statement in which he vowed not to give up the country\u2019s nuclear or missile technologies. He also signaled Tehran would keep control of the Strait of Hormuz.<\/p>\n
Khamenei replaced his father Ali, who was killed on the first day of the conflict. He\u2019s not been seen or heard in public since his appointment, with several reports saying he was badly injured in the same airstrike on his father.<\/p>\n
At the same time, US military commanders are set to brief Trump on options on Thursday, Axios reported, citing unnamed sources. Centcom, which oversees American forces in the Middle East, has prepared a plan for a short wave of strikes to break the negotiating deadlock, Axios said.<\/p>\n
\u201cTrump wants to end the Iran war, but not on the terms proposed by Tehran,\u201d said Becca Wasser and Chris Kennedy, analysts at Bloomberg Economics. \u201cThat suggests the question is no longer whether he escalates to push for a better offer, but when and how. We think the most likely window for action is within the next two weeks, and that renewed US strikes are the most likely course.\u201d<\/p>\n
Iran has said it won\u2019t reopen the strait to commercial vessels until the US lifts its blockade. It\u2019s unclear how long Iran has left before it runs out of oil storage and is forced to cut production.<\/p>\n
Signs of strain on the Iranian economy have emerged in recent days, with the currency weakening to a fresh low.<\/p>\n
Here\u2019s more on the war:<\/p>\n
US Defense Secretary Pete Hegseth sparred with lawmakers as Democrats stressed the Iran war was nearing the 60-day threshold that triggers a requirement, per the War Powers Act, of Congressional authorization for any further action.<\/p>\n
Democrats also blasted Hegseth and other senior Pentagon officials over a cost estimate for the war \u2014 $25 billion \u2014 that one US Senator said was \u201cprobably less than half, maybe less than a quarter, of the total cost of war.\u201d<\/p>\n
–With assistance from Devika Krishna Kumar, Paul Wallace, Alister Bull, Patrick Sykes, Eltaf Najafizada and Omar Tamo.<\/p>\n
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