Global oil markets jumped 3% following President Donald Trump's announcement canceling scheduled meetings with Iranian officials and vowing military intervention if Iranian forces target protesters. The move heightened geopolitical tensions in the Middle East.
- Oil prices rose 3.1% with Brent crude hitting $92.40 per barrel.
- WTI crude reached $88.75, its highest daily gain since October 2024.
- President Trump canceled all planned diplomatic meetings with Iran.
- Trump declared potential U.S. military intervention if Iranian forces kill protesters.
- ExxonMobil (XOM), Chevron (CVX), and Shell (SHEL) saw stock gains between 2.4% and 3.7%.
- U.S. defense spending increased by 6.2% in Q4 2025.
Crude oil futures rallied sharply on Tuesday, with Brent crude closing at $92.40 per barrel—up 3.1%—and WTI reaching $88.75, marking the largest single-day gain since October 2024. The surge followed President Donald Trump's declaration that diplomatic engagement with Iran had been suspended indefinitely amid escalating unrest in Tehran and other cities. Trump stated during a press conference that any use of lethal force against civilian demonstrators by Iranian authorities would trigger immediate U.S. military response. He emphasized that 'help is on the way' for protesters, citing intelligence reports suggesting an increasing number of casualties. This marked a significant shift from previous administration policies of cautious deterrence. The energy market reacted swiftly to the escalation risk, with traders pricing in potential supply disruptions should conflict spread to key shipping lanes like the Strait of Hormuz. A prior spike in oil prices occurred in late 2024 when Saudi Arabia and UAE temporarily halted crude exports due to regional instability; this time, concerns focused on possible targeting of infrastructure near major oil terminals in southern Iran. Investors also noted that U.S. defense spending had increased by 6.2% in Q4 2025 as part of a broader rearmament initiative, reinforcing the perception that military readiness was being elevated ahead of potential confrontations. Energy firms such as ExxonMobil (XOM), Chevron (CVX), and Shell (SHEL) saw their stock values rise by 2.4–3.7% in early trading, reflecting optimism about higher margins under strained supply conditions. Market participants remain cautious, however, as uncertainty persists over whether the U.S. will pursue unilateral action or coordinate with NATO allies. Analysts warn that sustained volatility could push global oil benchmarks above $100 if diplomatic channels remain closed for more than two weeks.