Oil Rebounds Above $70 as Trump Warns of Iran's Annihilation Ahead of Doha Talks
Oil prices climbed back above $70 per barrel on June 29 after a weekend of US-Iran military exchanges rattled energy markets, even as both sides agreed to pause hostilities and head to Doha for talks. Trump issued a stark warning that Iran could face total annihilation if strikes continue.
Crude oil markets staged a recovery on Monday, June 29, with prices climbing back above the $70 per barrel threshold following a volatile weekend of military exchanges between the United States and Iran in the Strait of Hormuz region. The rebound came even as both nations agreed to pause hostilities and resume diplomatic negotiations.
West Texas Intermediate futures advanced 1.3%, settling at $70.17 per barrel, while Brent crude reached $73.21. Both benchmarks had previously hit their weakest levels since late February on Thursday, June 25, right before the latest wave of strikes erupted.
**A Weekend of Escalating Strikes**
The confrontation was set off on June 25, when Iran's Islamic Revolutionary Guard Corps (IRGC) carried out a drone attack on the Ever Lovely — a Singapore-flagged container vessel operated by Taiwan's Evergreen Marine. The ship was navigating the southern passage near the Omani coastline when it was struck, coming just days after the United Nations had announced an evacuation plan for hundreds of vessels stranded in the region.
The United States responded with retaliatory airstrikes on Iranian military installations on June 26. The following day, the IRGC launched drone attacks against US forces stationed in Bahrain, prompting another round of American strikes on Iran the same day. By June 28, Iran had expanded its targeting to include US positions in both Bahrain and Kuwait.
President Donald Trump took to Truth Social to issue a stark warning, stating that US aircraft had struck Iranian missile and drone storage facilities in response to repeated ceasefire violations. His message left little room for ambiguity: "If that happens, the Islamic Republic of Iran will no longer exist!" The post marked one of the most direct threats of national annihilation directed at Tehran from the White House in recent memory.
**Markets Navigate Between War Signals and Peace Hopes**
A senior US official confirmed to Reuters that both parties had agreed to stand down temporarily, with vessel traffic through the Strait expected to resume freely. Technical-level talks were scheduled to take place in Doha on Tuesday to address the underlying dispute.
However, Iran's Foreign Minister Abbas Araghchi maintained a firm stance, asserting that Tehran holds sole authority over navigation through the Hormuz corridor and has no intention of surrendering that control under external pressure.
Shipping data painted a grim picture of the disruption caused by the weekend's events. Only 48 vessel transits were recorded through the Strait of Hormuz between June 26 and June 28, a sharp decline from the 70 crossings logged on the Wednesday prior to the escalation.
**Oil's Asymmetric Response to Conflict and Diplomacy**
Energy markets have displayed a notable pattern throughout the month: oil prices surge aggressively on signals of military conflict but respond with far more muted gains when diplomatic progress is reported. This asymmetry has kept traders on edge, uncertain whether geopolitical risk will fully unwind or intensify further.
All eyes are now on Tuesday's session in Doha, which will serve as a critical test of whether Washington and Tehran can bridge their fundamental disagreement over who controls one of the world's most strategically vital maritime chokepoints — a waterway through which a significant share of global oil supplies passes daily.
