Trump vows to seize Kharg Island as oil prices surge
President Trump threatened to strike Iran “very hard” and seize Kharg Island, a terminal handling 90% of Iranian crude exports, following an exchange of drone and missile attacks. Prediction markets indicate a low probability of a permanent peace deal by June 30 or normalized traffic in the Strait of Hormuz by July 31. Consequently, Brent crude is trading near $93 a barrel, boosting energy stocks like Exxon Mobil Corp. and Chevron Corp.
*this image is generated using AI for illustrative purposes only.
President Donald Trump vowed to seize Iran’s main oil hub and take “total control” of its oil and gas markets, escalating the standoff after both sides traded strikes for a second straight day. In a Truth Social post this morning, Trump said the U.S. would hit Iran “very hard tonight” and would take Kharg Island, the terminal where about 90% of Iranian crude is loaded onto tankers. He likened the move to U.S. pressure on Venezuela.
The flare-up began Monday when an Iranian drone brought down a U.S. Army Apache helicopter near the Strait of Hormuz, triggering the military’s first sea drone rescue. U.S. strikes on nearly 20 Iranian targets followed, and Iran fired back at American bases in Bahrain, Kuwait and Jordan. Trump had insisted days earlier that a deal was “two or three days” away, then pivoted to calling Iran “all talk and no action.”
Market Reaction and Prediction Data
Traders are pricing the breakdown in real time. Polymarket’s market on a permanent US-Iran peace deal by June 30 has fallen to 16%, from a high of 75% in May. A Polymarket contract on whether Hormuz traffic returns to normal by July 31 sits near 25%. That skepticism may be warranted, as commercial transits have run far below normal since the conflict erupted in late February.
| Metric | Value |
|---|---|
| Brent Crude Price | Near $93 a barrel |
| Peace Deal Odds (June 30) | 16% |
| Hormuz Traffic Normalcy Odds (July 31) | 25% |
| Kharg Island Control Change Odds (March 31) | 8% |
Energy Sector Impact
Trump claimed a covert U.S. mission had quietly moved more than 200 commercial ships and 100 million barrels through Hormuz, crediting it for keeping crude near $90 rather than above $200. A U.S. attack on Kharg would likely tighten an already-stressed market. That makes energy the tradeable angle, with Exxon Mobil Corp., Chevron Corp. and the United States Oil Fund all higher Thursday as traders price the Middle East risk premium. Trump has promised a deal at least 38 times since March, and each deadline has slipped.
How will a sustained disruption at Kharg Island affect global refinery margins and product availability?
What contingency plans are major shipping lines implementing to navigate the Strait of Hormuz if the conflict escalates?
Could the spike in oil prices accelerate the transition to renewable energy sources or increase short-term demand for coal and natural gas?
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