The price of oil jumped sharply Monday after President Donald Trump cast doubt on another deal with Iran to extend the expiring ceasefire.
“They want to make a deal, but they’re not going to make the kind of a deal that I feel is necessary,” Trump said in the Oval Office.
Shortly after Trump’s comments, international oil benchmark Brent jumped above $91 per barrel. It closed the trading session up 2.65% at $90.87.
U.S. crude oil also sharply rose by 2.5% to close at $84.50 per barrel. The moves higher came after generally flat trading throughout the day, until Trump began speaking.
Treasury yields also moved toward the highest levels of the day after Trump’s comments. The 10-year yield, which plays a major role in guiding consumer borrowing rates, rose to 4.72%.
The 30-year U.S. government bond yield rose above 5.3% to its highest level since June 2007.
Stock indexes, which were already lower on the day, extended their declines slightly. The S&P 500 ended the day down 0.5%, while the Nasdaq closed lower by about 0.3%.
In the Oval Office event, Trump also contended that U.S. forces “control” the critical Strait of Hormuz.
“We control it with the blockade, and I like the idea of declaring it a territory,” Trump said, referring to a U.S. naval blockade on the Iranian coastline. “We have total control over the strait.”
The president also said that the waterway was “open.” That comment did not align with the latest shipping traffic data.
On Sunday, only three ships crossed the Strait of Hormuz, according to data from MarineTraffic. On Saturday, that figure was just 10.
Overall last week, traffic through the strait was down 19.5% from the already-depressed traffic during the prior week. Before the war, an average of about 130 ships would cross the waterway each day.
Earlier Monday, in a phone interview with Fox News about the Strait of Hormuz and Oman, Trump reportedly said, “If Oman gets in the way, we’ll bomb the s— out of them.”
The president and his administration have maintained since the war with Iran started that oil prices would fall dramatically after the war ends. Oil prices have been volatile since a 60-day memorandum of understanding was signed with Iran in June.
After falling back to nearly prewar prices in early July, they have since rebounded higher with no end in sight to the fighting.
In recent days, several oil tankers have also reportedly been attacked.
Oil prices are almost 50% higher than they were at the start of the year and more than 25% higher since Feb. 28, when the war began.
Gas prices also remain elevated for consumers. As of Monday morning, the national average price for gas was $4.06 per gallon, a 36% jump since the war began.
