Oil and U.S. gas prices climbed amid Trump’s consideration of extending a blockade of Iranian ships and ports, with Iran warning of retaliation.
Oil prices rose to a record level on Thursday as President Donald Trump weighed extending a military blockade aimed at Iranian ships and ports, a step that market watchers say could affect energy prices and consumer costs.
Brent crude briefly topped $125 per barrel early Thursday before slipping to below $120. In the United States, the national average for gasoline climbed to about $4.30 a gallon, the highest level in nearly four years.
The decision comes as Trump has warned Iran to “better get smart soon.” He has also suggested the blockade is working as intended, while Iran has warned it will not reopen the Strait of Hormuz unless the U.S. ends the blockade.
Oil and gas jump amid blockade debate
Trump is holding his line that the blockade would remain in place until Iran agrees to a deal addressing its nuclear program. Speaking to reporters on Wednesday, Trump said, “The blockade is genius,” adding that it has shown “how good our Navy is.”
Trump also argued that U.S.. actions have constrained Iran’s capabilities, saying U.S.. forces have “knocked out” the navy, air force, anti-aircraft and radar systems.. He added that Iran has “some missiles” and some missile-making facilities. and that the remainder could come “very quickly” without a deal.
Separately, reporting indicated that Trump’s national security team presented multiple options to him this week as Iran continues to disrupt traffic through the Strait of Hormuz. Iran, for its part, said it would not reopen the strait until the U.S. ends the blockade.
Iran warns blockade won’t be tolerated
Iranian officials warned on Thursday that the blockade cannot continue without consequences.. Mohsen Rezaei. described as a senior military adviser to Iranian Supreme Leader Mojtaba Khamenei. said on state-run TV that Iran “will not tolerate” the blockade and that “if the blockade continues. Iran will respond.”
Iran’s President Masoud Pezeshkian also said the U.S. blockade is “doomed to failure,” arguing it is contrary to international law and against regional interests and global peace and stability, according to remarks reported through Mehr News Agency.
U.S. carriers and broader tensions
As the standoff continues, the U.S. Navy remains positioned in the region. The USS Gerald R. Ford is heading home after a record deployment of more than 300 days. American officials said it will leave the region in the coming days and is expected to return to its home port in Virginia by mid-May.
The Ford’s departure follows the arrival of the USS George H.W. Bush in the region last week, bringing the total number of American aircraft carriers in the Middle East to three—an alignment not seen since 2003. The USS Abraham Lincoln has also been in the region since January.
Threat to reduce troops in Germany
The administration’s focus on Iran comes alongside new tensions within Europe. Trump said he is threatening to pull U.S. troops out of Germany amid a feud with German Chancellor Friedrich Merz over the war with Iran.
Earlier this week, Merz said the U.S. is being “humiliated” by Iran and accused the U.S. of having “no strategy” in the war. While Merz told reporters that his personal relationship with Trump is “as good as ever,” he also said he had doubts from the beginning about what was set in motion.
On Wednesday, Trump said the U.S. is studying and reviewing a possible reduction of troops in Germany, with a determination expected over a short period of time.