Energy stocks surged after Trump warned of increased strikes on Iran

Investing.com - Energy companies’ shares rose Thursday as oil and gas prices surged earlier, after President Trump signaled that the U.S. will continue military strikes against Iran, raising concerns about a long-term disruption to global oil supplies.

In pre-market trading as of 07:25 a.m. Eastern Time, shares of Chevron and Exxon Mobil were up 3% and 3.4%, respectively, while ConocoPhillips also rose 3.1%. The broader XLE ETF (NYSE:XLE) was up 2.9%.

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Brent crude futures jumped nearly 8% to $109.12 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 8.7% to $108.84. Both benchmarks had fallen on the prior trading day and briefly dipped at the open.

In a televised address, Trump said U.S. forces would intensify their offensive against Iran over the coming weeks, with the goal of preventing Tehran from obtaining nuclear weapons. He said, “In the next two to three weeks, we’re going to hit them extremely hard. We’re going to take them back to the Stone Age where they belong.”

Trump added that “discussions are ongoing,” but did not indicate whether a ceasefire is imminent. The remarks reinforced earlier signals that briefly calmed the market. On Wednesday, Trump told reporters that even without a formal agreement, the U.S. could withdraw from Iran “in two to three weeks.”

Before the speech, Trump posted on social media that Iran’s “new regime president” has requested a ceasefire, seemingly opening the door for negotiations. Iran’s foreign ministry denied the claim, and state media reported that Tehran is not seeking a ceasefire.

Trump did not provide any details of measures that could lead to the Strait of Hormuz reopening.

As the conflict escalates, threats to shipping are also increasing. Qatar’s Ministry of Defence said that on Wednesday, an oil tanker leased to QatarEnergy (QatarEnergy) was hit by an Iranian cruise missile in Qatari waters.

Some market participants said they have stopped trading cargoes priced against the Middle East benchmark in Dubai, which is commonly used to set prices for nearly one-fifth of the world’s crude oil supply, because they cannot use ports within the Strait of Hormuz.

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