Oil prices surged to their highest levels in nearly four years over the weekend, with analysts warning that further spikes are likely on Monday as U.S. and Iranian threats escalate the risk to critical energy infrastructure. On Saturday, U.S. President Donald Trump warned that he could “obliterate” Iran’s power plants if Tehran failed to reopen the Strait of Hormuz within 48 hours, marking a stark escalation just a day after suggesting a possible winding down of the conflict that has entered its fourth week.
Iran responded on Sunday by threatening to strike U.S.-linked energy and desalination facilities in the Gulf if Trump’s ultimatum was carried out. This standoff has injected a “48-hour ticking time bomb of elevated uncertainty” into global markets, according to IG market analyst Tony Sycamore. Brent crude futures for May closed Friday at $112.19 a barrel, up 3.26%, marking the highest settlement since July 2022.
Analysts warn that the situation could severely disrupt Gulf infrastructure. Amrita Sen, founder of Energy Aspects, said that Trump’s threats risk a “scorched earth” scenario for oil and energy facilities, and cautioned against assumptions that Iran might easily yield. Tehran has previously targeted ports and refineries across Saudi Arabia, Kuwait, Bahrain, the UAE, and Qatar in retaliation for strikes on its infrastructure. The Strait of Hormuz has already been closed during the conflict, leading to a loss of roughly 440 million barrels over 22 days.
While Iran has so far avoided attacks on large desalination plants in Saudi Arabia and the UAE, which supply water to millions, experts warn that targeting these facilities could render cities uninhabitable within weeks, triggering mass evacuations and cascading power failures, according to the Atlantic Council. Brent crude gained nearly 8.8% last week, while WTI futures remained slightly lower, widening its discount to Brent to the largest in 11 years.
Restoring Gulf oil supplies could take up to six months, International Energy Agency chief Fatih Birol told the Financial Times. Meanwhile, the Trump administration is reportedly considering plans to occupy or blockade Iran’s Kharg Island to pressure the reopening of the Strait of Hormuz, further escalating the risk of a protracted and disruptive confrontation in the region.
