“IRAN CAN NOT HAVE A NUCLEAR WEAPON. I said it over and over again! Everyone should immediately evacuate Tehran!” he wrote.
US West Texas Intermediate oil futures jumped as much as 2.7% and were 0.3% higher at $72.05 a barrel at 9:31 p.m. ET. Brent oil futures gained as much as 2.2% before trading 0.4% higher, at $73.50 a barrel.
US stock futures were also lower as of 9:34 p.m. ET:
Vishnu Varathan, Mizuho’s head of macro research for Asia, excluding Japan, wrote that Trump’s warning has injected even more uncertainty, risk, and volatility into the market.
Varathan said that different interpretations of Trump’s broader remarks might imply a strategy of brinkmanship intended to secure a deal that curtails Iran’s nuclear ambitions.
However, given Israel’s continued strikes on Iran — and the limited prospects for negotiations — the immediate concern lies in the risk of escalation and regional spillover, Varathan added.
“If the leadership in Iran smells regime change on the agenda, the risk is that it may shift from loss-minimizing survival strategies to destruction-maximizing end-game,” wrote Varathan.
Markets are concerned about Iran making good on its frequent threats to blockade the Strait of Hormuz, a key oil and gas shipping route, just as the US heads into peak summer demand season.
“A blockade remains the key risk that could push markets into uncharted territory,” wrote Janiv Shah, a vice president of oil markets at Rystad Energy, on Monday.
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