Brent crude surged to $106.23 per barrel in overnight trading on April 1, driven by the market's assessment that President Trump's primetime address offered no path toward de-escalation with Iran [1]. West Texas Intermediate followed, crossing $103 for the first time since the initial shock of the Strait of Hormuz closure in early March.

This is the third time Brent has breached the $100 threshold since the war began on February 28. The first came during the chaotic opening week when Iran's Navy mined the Strait. The second occurred on March 16, when the first reports of American casualties in an Iranian missile strike sent prices briefly to $106.40 before settling. Tuesday night's spike is different. It came not from a battlefield event but from a speech — a signal that the market has begun pricing in duration rather than incident [2].

Trump's address, delivered from the Oval Office at 9 PM Eastern, contained the elements that traders had been tracking. He reiterated the "two to three weeks" timeline for departure but paired it with language about Iran being "sent back to the Stone Age" and made no mention of negotiations, intermediaries, or off-ramps. Secretary of Defense Pete Hegseth posted "Back to the Stone Age" on social media within minutes of the speech ending [3]. For a market that had been hoping for at least rhetorical de-escalation, the message was unambiguous.

The supply picture reinforces the price signal. Approximately 20% of the world's daily oil supply transits the Strait of Hormuz under normal conditions. Iran's blockade, now in its fifth week, has reduced that flow to a trickle of vessels willing to pay Tehran's two-million-dollar toll per transit. Saudi Arabia, the UAE, Kuwait, and Iraq — collectively responsible for roughly 20 million barrels per day of production — remain functionally cut off from their primary export route [4].

The United States Strategic Petroleum Reserve release, announced on March 18, has provided temporary downward pressure. The administration authorized the release of 140 million barrels over 90 days, approximately 1.5 million barrels per day. But the SPR now sits at its lowest level since 1983, and the release rate merely replaces a fraction of the lost Gulf supply. It is aspirin for a structural wound [5].

European markets responded sharply. The Euro Stoxx 50 futures dropped 1.8% in pre-market trading. The FTSE 100 opened down 1.2%. The energy-intensive industrial sectors — chemicals, steel, airlines — fell hardest, with Ryanair and Lufthansa each losing more than 3% in early trading. European natural gas prices, benchmarked to the TTF hub in the Netherlands, rose 8% on fears that the oil disruption would spill into LNG markets as Gulf producers divert resources [6].

In the United States, the national average gasoline price stood at $4.03 per gallon on April 1, according to AAA — up from $3.12 on February 27, the day before the war started. If Brent sustains above $100 for another two weeks, analysts at GasBuddy project the national average will reach $4.50 by mid-April and could touch $5.00 by Memorial Day, a threshold that has historically correlated with measurable reductions in consumer spending [7].

The commodity response to Trump's speech illustrates a broader market shift. In the war's first two weeks, oil spiked on events — a missile strike, a ship sinking, a refinery fire. Now it spikes on words. The market is no longer trading what happened. It is trading what it believes will happen, and what it believes is that this war is not ending soon.

Goldman Sachs raised its Q2 Brent forecast to $110 per barrel on April 1, up from $95 two weeks ago. JP Morgan went further, modeling a "sustained conflict" scenario in which Brent averages $115 through the summer. Morgan Stanley, the most bearish of the major banks, still raised its target to $100, calling it a "floor, not a ceiling" [8].

The irony is structural. Trump justified the war partly on the grounds that Iran's nuclear program threatened regional stability — and by extension, the global energy supply. Five weeks in, the war itself has done more damage to the energy supply than Iran's nuclear program ever did.

-- Hendrik Van Der Berg, Brussels