Oil prices extend rally as Trump issues new threat to Iran amid stalled talks

WASHINGTON — US President Donald Trump has threatened Iran to “better get smart soon” and accusing Tehran’s leadership of failing to “get their act together” as efforts by Washington and Tehran to end hostilities appeared at a standstill. Oil prices advanced again on Wednesday as traders balanced the United Arab Emirates’ shock departure from OPEC with indications that a near-term conclusion to the Iran war is unlikely. Trump is unhappy with Tehran’s latest proposal to end the war and has instructed aides to prepare for an extended blockade of Iran, the Wall Street Journal reported late Tuesday. Iran is expected to submit a revised peace proposal soon, sources say, after Trump indicated that he would not accept an earlier version. International benchmark Brent crude futures with June delivery traded 3% higher at $114.64 per barrel at 6:00 a.m. ET, extending gains after notching its seventh consecutive positive session on Tuesday. US West Texas Intermediate futures with June delivery rose 3.6% to $103.54 per barrel. The WTI contract, which settled up 3.7% in the previous session, has racked up gains of more than 49% since the US and Israeli-led war against Iran started on Feb. 28. The latest move higher comes amid reports that the US will look to extend its blockade of Iranian ports, deepening fears of prolonged disruption through the strategically vital Strait of Hormuz. “Concerns about a more prolonged stagflationary shock have risen,” Deutsche Bank analysts said, noting that Brent futures contracts for delivery later this year were trading close to the highs reached in late March. Stagflation refers to a period of low economic growth and high inflation. US stock futures were mixed, pointing to a cautious start on Wall Street ahead of a raft of Big Tech earnings and a Federal Reserve meeting that looks set to be Jerome Powell’s last as chairman. Amazon, Alphabet, Meta and Microsoft are all due to report financial results after the closing bell. Investors are betting the Fed will leave interest rates unchanged until there is more clarity on the extent to which the war in Iran will feed through into consumer prices. Higher oil prices weighed on European stock markets which were broadly lower in midsession trade.Strategists at Dutch bank ING said in a research note published Wednesday that the UAE’s exit from the oil producer group represents “a big blow” to OPEC and would certainly be welcomed by Trump “as it erodes OPEC’s influence in the oil market, while it should also be beneficial for importers and consumers.” “However, in the near term, the biggest driver for oil prices remains developments in the Gulf and the timing of a resumption in oil flows through the Strait of Hormuz,” they added. — Agencies