Trump has threatened to "blow up" Iran's Kharq. What will happen to oil?

US President Donald Trump has declared "progress" in peace talks with Iran. But at the same time, he threatened to strike the entire Iranian energy infrastructure, including Iran's important export hub of Kharq Island, if a ceasefire agreement is not signed soon and the Strait of Hormuz is not opened.

At the time of publication, Brent oil is trading at $115 per barrel. French bank Societe Generale has revised its oil forecast against the backdrop of the ongoing conflict in the Middle East, analysts now believe that in April the average price of the global benchmark barrel of Brent will be $125, Bloomberg writes.

In trading on March 30, the value of May Brent futures jumped to $116.89 per barrel, reacting to the ongoing escalation of conflict in the Middle East. However, Brent slowed midway through the trading day, dropping to $114 a barrel at one point - Trump wrote on the social media network TruthSocial that the U.S. is "in serious negotiations with a new, more reasonable [Iranian] regime to end the military operation" in the Middle East. "If for any reason an agreement [with Tehran] is not reached soon and the Strait of Hormuz is not immediately 'open for business,' we will end our glorious 'stay' in Iran by blowing up and completely destroying all of their power plants, oil wells, Kharq Island (and possibly all desalination plants!) that we have intentionally not touched yet," Trump said. He added, however, that "significant progress" has been made in negotiations with Iran so far. Tehran denies information about contacts with Washington.

The situation around the Strait of Hormuz remains the main factor of oil quotations growth. Societe Generale assumes that this key transportation artery will remain virtually closed until at least mid-April. Experts note that because of the blockade, the world market has been deprived of supplies of about 15 million barrels per day, which creates conditions for short-term price hikes in April up to $150, according to a note by Societe Generale analysts Michael Hague, Ben Hoffa and Jeremy Sellem, writes Fxstreet.

Against the backdrop of these expectations, the bank also raised its long-term forecast for the end of 2026 from $65 to $80 per barrel, stating that the market is now "structurally more stressed, more vulnerable and highly sensitive to further shocks".Last week, two investment banks - Citi and Macquarie - predicted a rise in oil prices to $200 per barrel if the conflict in the Middle East lasts until the end of June. Also last week, the head of BlackRock Larry Fink outlined two opposite scenarios: a year from now, oil could cost $40 per barrel or exceed $150, he said in an interview with the BBC. Prices could fall sharply if Iran mends relations with the international community, he said. However, if the conflict is not resolved, the world is waiting for "years of oil at $100-150" per barrel, which will lead to a "severe and sharp recession," Fink warned.

This article was AI-translated and verified by a human editor