Trump could attack Iran in days — what’s at stake for the oil market

An all-out war between the US and Iran could, in a worst-case scenario, cause oil prices to rise and cause an economic downturn.

As a massive US military build-up continues in the Middle East, President Donald Trump signaled on Thursday that he will decide within the next 10 days whether to launch an attack on Iran.

“This situation in Iran is constantly scaring the living daylights out of this market,” John Kilduff, founder of Again Capital, told CNBC. “There will be some mischief by Iran and the market is pricing it in.”

Trump warned that an attack on Iran would be “much worse” than the limited US airstrikes that targeted its nuclear facilities last June, but he also left open the possibility that negotiations could still lead to a deal to manage Iran’s nuclear program.

Pricing risk

Oil prices have risen nearly 6% this week as traders price in the increased risk of military action. The market’s biggest fear is that the war will interrupt the oil flow in the Strait of Hormuz.

The Bosphorus is a vital transit point for global oil trade. According to data from consultancy firm Kpler, on average, more than 14 million barrels of oil and condensate passed through the narrow waterway per day in 2025, and this figure accounts for one-third of global seaborne oil exports.

According to Kpler, approximately three-quarters of the oil passing through the strait goes to China, India, Japan and South Korea.

of Iran Revolutionary Guards On Tuesday, we partially closed the strait for a few hours to conduct military exercises. According to the semi-official Tasnim news agency, citing Iranian Navy Rear Admiral Ali Reza Tangsiri, the Guards are ready to close the strait if ordered by Iranian leaders.

“Iran can disturb Hormuz for much longer” [than] Many market participants think so,” said Bob McNally, founder of Rapidan Energy.

worst case scenario

McNally said the United States could face a similar but worse situation to the 52-day air campaign against Houthi militants in Yemen, who have disrupted the Red Sea with missile attacks.

“Iran has much better weapons and a much better coastline than the Houthis,” the energy strategist said. It also has large stockpiles of mines and short-range missiles that could make the strait unsafe for commercial traffic.

“Lloyd’s will not allow or insure tankers to pass through Hormuz in this type of environment,” McNally said. London insurers.

Without oil flowing through the Strait, global energy markets cannot balance supply and demand, McNally said. He said a prolonged shutdown would push oil prices above $100 a barrel, restricting demand and potentially precipitating an economic downturn.

McNally said Iran could calculate that it could trigger Trump’s worst fears by collapsing the economy ahead of the US midterm elections in November.

Rystad Energy predicts oil prices will rise sharply to between $10 and $15 per barrel in a scenario with a broader conflict between the United States and Iran, according to a research note published earlier this month.

Limited strikes

But Trump also has a wide range of options, including a blockade or other actions that fall short of a full-scale regional war, McNally said.

Any U.S. military action would likely be “surgical and designed to evade Iran’s oil production and export infrastructure,” Natasha Kaneva, JPMorgan’s head of global commodity strategy, said in a report on Thursday. The post-strike rally in crude oil prices “will eventually weaken as global fundamentals remain relatively soft,” Kaneva said.

Goldman Sachs sees no risk of a similarly large and sustained supply disruption, at least in the base case, Daan Struyven, head of oil research, said in an interview with CNBC. But he said a conflict that would cause Iranian exports to lose 1 million barrels a day for a year would raise crude oil prices by $8 and force the market to reassess the risk of further rises.

The Trump administration also seems unconcerned about the risk of disruption in the Middle East.

“The world is very well equipped with oil right now,” Energy Secretary Chris Wright said in a Feb. 6 interview with CNBC, which gave the president “more leverage in his geopolitical actions to not worry about a crazy increase in oil prices.”