Oil prices surged to their highest level in over a month following U.S. Secretary of State Marco Rubio's stern warning that the United States would persist in striking Iran as long as it interferes with shipping in the Strait of Hormuz.
Brent crude rose nearly 4 percent to approximately $95 per barrel on Wednesday, as U.S. forces conducted strikes on Iran for the eleventh consecutive night. Traders are anticipating a prolonged conflict.
Rubio delivered the warning to reporters on the sidelines of the ASEAN foreign ministers' meeting in Manila. He asserted that Washington would maintain its naval presence in the region, while also indicating a potential openness to a diplomatic resolution. "We're going to continue to protect shipping, we think other countries should join us in that endeavor," Rubio stated.
He accused Tehran of violating a ceasefire agreement aimed at reopening the Strait, which was reportedly agreed upon to be completed within two weeks of its signing. "When those commitments are not kept, which is what's happened in this particular case, then there will be consequences," Rubio added.
The global energy market is currently facing pressure from multiple fronts, including disruptions in the Strait of Hormuz, the Red Sea, and the Black Sea. At least two oil tankers destined for the Bab al-Mandeb chokepoint in the Red Sea rerouted overnight after Iran-backed Houthi rebels threatened to blockade Saudi Arabia. This route previously handled 12 percent of global oil shipments before the current conflict.
Meanwhile, Ukrainian attacks on Russian shipping have disrupted a third major route. A key Black Sea terminal has halted deliveries of Kazakh oil following strikes on tankers.
These supply chain pressures are beginning to impact consumers, with gasoline prices exceeding $4 per gallon and crude oil approaching $100 per barrel. Financial markets are now pricing in a 24 percent probability of a Federal Reserve interest rate hike this month.
Rubio reiterated that the U.S. desires peace and would welcome an agreement with Iran if Tehran abandons terrorism and its nuclear ambitions. However, he also signaled President Trump's readiness to escalate, stating, "The President has many options available to him, if they continue to insist on not being cooperative ... I think Iran knows we have many options."
According to Rubio, Iranian officials have attempted to de-escalate the fighting, but U.S. negotiators remain skeptical. "The problem we're having right now is that they're not serious about talks," he said. "If they're serious, we're serious. If they're not, then we will do what is necessary to protect that, our interests, and also the interests of our allies."
This warning follows President Trump's remarks from the previous day, where he claimed Iran was eager for a meeting but that Washington had no interest. Trump also reiterated his threat to bomb a suspected Iranian nuclear site, referred to as Pickaxe Mountain, stating it would happen "pretty soon, and very heavily."