Brent crude hits $120: Trump vows Hormuz blockade until Iran surrenders nuclear programme
Washington: Brent crude oil prices eclipsed $120 per barrel on Thursday following President Donald Trump’s declaration that the U.S. naval blockade of the Strait of Hormuz will remain in place until Tehran accepts a diplomatic settlement.
The president characterised the maritime encirclement as a primary instrument of leverage in his effort to dismantle Iran's nuclear ambitions. In an exclusive interview with Axios on Wednesday, Trump argued that the strategy of economic strangulation was proving superior to kinetic military intervention.
"The blockade is somewhat more effective than the bombing. They are choking like a stuffed pig. And it is going to be worse for them. They can't have a nuclear weapon," Trump told Axios.
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Diplomatic Stalemate
According to the report, the president dismissed an Iranian proposal that sought the immediate reopening of the Strait and the cessation of the blockade as a prerequisite for nuclear negotiations. Trump has instead maintained that Iran must fulfil specific U.S. demands before any maritime restrictions are relaxed.
While the president currently favours the blockade as his chief tactical advantage, the Axios report noted that he has not ruled out military strikes should the diplomatic impasse continue. During the interview, however, the president declined to elaborate on any potential combat contingencies.
The escalation comes amid deepening instability in West Asia, sparking fears of a sustained collapse in global energy flows. The Strait of Hormuz serves as a vital artery for international oil and gas shipments, and its continued obstruction is expected to exert profound pressure on global markets.
Economic Warnings
The burgeoning crisis drew a sharp rebuke from renowned economist Jeffrey Sachs, who warned that the world is on the precipice of a significant financial contraction. Addressing the FICCI Legend Series, Sachs underscored the perils inherent in the ongoing supply shocks.
"The world economy will suffer a terrible crisis," Sachs stated, noting that the current market reflects a precarious and "fragile balance."
He cautioned that expectations of a swift resolution might be misplaced, potentially leading to a spiral in energy costs. "The betting is that somehow that shortage will be alleviated... but if it isn't, the price will continue to rise," Sachs added.
Sachs further observed that the fusion of high-intensity geopolitical friction and escalating petroleum costs could destabilise economies worldwide. Global observers continue to monitor the price surge, as a protracted shutdown of the Strait of Hormuz threatens to further contract supply and drive valuations significantly higher in the coming months.
With inputs from ANI