Oil prices rose as the Middle East crisis escalated yesterday with US President Donald Trump’s threat to destroy Iran’s main export terminal and after the entry of Yemen’s Houthi rebels into the war. However, European and US stocks rose as markets focused on Trump’s comments on negotiations to end the fighting.
Trump expressed confidence that a negotiated settlement would soon be reached but warned that if it were not — or if Iran continued to block the Strait of Hormuz to most sea traffic — US forces would “blow up” Kharg Island and all of Iran’s oil wells and electricity generation. Kharg Island, located off the west coast of Iran, is a vital oil terminal for the country and is being eyed by the Pentagon for ground operations, though the United States insisted it would stop short of a fullscale invasion.
Trump, however, said yesterday that the US is in “serious” talks with the “new and more reasonable” regime in Iran – but warned if a ceasefire is not agreed, the US will hit sites it has “purposefully not yet ‘touched’”. Brent North Sea crude, the international benchmark, jumped to almost $117 per barrel in Asian trading.
It stood up 2.3 per cent at $107.71 per barrel in late morning trading in New York, reports AFP. Wall Street’s main equities were higher in late morning trading, with the Dow adding 0.7 per cent.
Meanwhile, White House Press Secretary, Karoline Leavitt, has expressed her optimism about the war in Iran, aiming to reassure the US public that, despite reports to the contrary, negotiations are still under way. Speaking at yesterday’s press briefing, she insisted that Iran’s leadership – what remains of it – is “increasingly eager” to negotiate.
However, publicly Iranian officials have downplayed how far along talks have got, and say any messages between the warring parties have gone through intermediaries. A spokesman for Iran’s foreign ministry earlier questioned how serious US efforts are to negotiate an end to the war in good faith. When asked about a possible “boots on the ground” operation in Iran, Leavitt said President Trump “has obviously declined to rule them out”.
She said the Pentagon aimed to provide the president with options, but that doesn’t mean he has made a decision. The White House Press Secretary also reiterated Trump’s statement last week that he would be ordering a 10-day pause in attacks in order to allow the Iranian leadership to re-open the Strait of Hormuz, the vital shipping lane where roughly 20 per cent of the world’s oil supply passes through.
Meanwhile, attacks continue in Iran, Lebanon, and across the region – with a refinery in Israel set on fire by debris from an intercepted missile; while traffic through the Strait of Hormuz remains way down on pre-war levels.
And in another development, the US reduced its purchase of Nigerian crude oil sharply in January 2026, with imports dropping by about 47.16 per cent month-on-month, according to the latest data from the U.S. Census Bureau and the US Bureau of Economic Analysis. Figures from the US International Trade in Goods and Services report indicate that US crude imports from Nigeria fell to 1.664 million barrels in January 2026, down from 3.149 million barrels recorded in December 2025. This represents a decline of 1.485 million barrels within one month, showing a significant contraction in Nigeria’s share of the US crude market.
