Oil surges past $104 as trump teases iran truce markets don’t believe
Brent crude vaulted 2.5 % to $104.42 at the London open Thursday, wiping out the last traces of the pre-strike discount that had briefly dragged it toward $72 last month. West Texas Intermediate followed with a 2.4 % spike to $92.40, sending refining margins back to levels last seen when Russian tanks rolled into Ukraine. The catalyst: a 3 a.m. White House tweet in which President Donald Trump claimed Tehran is “desperate to deal” but fears domestic backlash, a narrative flatly contradicted by iran’s foreign minister five hours later.
Tehran denies talks exist
Abbas Araqchi told state TV there are “no negotiations, no channels, only messages” and mocked Washington for floating surrender terms it has already abandoned. The soundbite ricocheted through Geneva trading desks, where algorithms had priced in a 60 % probability of a 48-hour cease-fire after Trump’s self-imposed ultimatum expired Monday untouched. The machines reversed hard.
Behind the jousting lies the Strait of Hormuz, still a de-facto war zone. Araqchi conceded the waterway is “restricted for enemies,” a formulation that insurers read as closed. At least 14 very-large-crude-carriers have diverted to the longer route around the Cape of Good Hope this week, adding 18 days and $4.3 million in freight cost per cargo. The backlog is already visible on satellite heat maps: 28 million barrels floating idle off Fujairah, the largest floating inventory since the 2019 drone strikes.
Trump’s five-day pause buys nothing
The Pentagon confirms the carrier USS Harry S. Truman remains inside the Persian Gulf, inside missile range. Iranian Revolutionary Guard fast boats circled it Wednesday, a provocation captured by a MQ-9 Reaper drone and uploaded—deliberately—within 30 minutes. Markets interpreted the footage as proof that the 96-hour “reprieve” Trump announced is simply the time needed to reload, not to reconcile.
Meanwhile, European refiners scramble for replacement barrels. Sources at TotalEnergies say the company has activated force majeure clauses on three Caspian cargoes, pushing Dated Brent to an $8.70 premium over Dubai—an unheard-of spread that signals physical shortage, not paper fear. Trafigura’s front-month time-spread exploded to $5.50 backwardation, the steepest since 1990, luring 40-year-old tankers out of retirement at daily rates above $120 k.
And the White House? Still threatening to “switch the lights off in Tehran” if Hormuz doesn’t reopen fully. Energy traders have stopped parsing the rhetoric; they just price the blackout risk at $12 per barrel and move on. The rally has legs because neither side has offered the market the only variable it still respects—verifiable de-escalation. Until that arrives, $110 Brent is a floor, not a ceiling.