Crude oil jumps back above $90 as Trump says U.S. will take Iran's Kharg Island

Oil prices surged past $90 per barrel after former President Donald Trump stated that the U.S. would seize Iran's Kharg Island, a key oil export terminal. The statement, made during a campaign event, raised fears of a direct military confrontation that could disrupt global oil supplies. Kharg Island handles approximately 90% of Iran's crude exports, making it a critical chokepoint. The threat comes amid heightened Middle East tensions, including Kuwait closing its airspace and Israel warning of launches from Lebanon. Analysts warn that any disruption to Iranian oil flows could tighten global supply, especially with OPEC+ already maintaining production cuts. The market is now pricing in a risk premium of $5-10 per barrel for potential supply outages.

Global Impact

Economically, a disruption at Kharg Island would spike oil prices, raising input costs for manufacturers and squeezing margins in transport and chemicals. Politically, the threat escalates U.S.-Iran tensions, potentially drawing in Gulf states and affecting diplomatic efforts in the region.