Trump convenes Situation Room on Iran strikes as oil tops $94

President Trump met with top security officials to plan new strikes on Iran, threatening to shatter a fragile cease-fire and push crude prices higher.

President Trump convened a Situation Room meeting with his top national security officials to discuss strike plans against Iran, two US sources said, as the two-month cease-fire unraveled and Brent crude climbed above $94 a barrel.

"The cease-fire is more like a lesser-fire, as we have seen with the escalating attacks and rhetoric over the last 48 hours," UN Secretary General António Guterres told the Security Council on Wednesday, warning the skirmishes could morph into a wider war.

The meeting included Vice President JD Vance, Secretary of State Marco Rubio, Director of National Intelligence John Ratcliff, CIA Director John Caine and envoy Steve Witkoff, according to Axios. Secretary of Defense Pete Hegseth participated from US Central Command headquarters. The gathering came hours after the US military struck Iranian air defenses, ground control stations and radar sites near the Strait of Hormuz — retaliation for an Iranian drone that downed a US Apache helicopter gunship on Monday.

The escalation threatens to derail diplomatic efforts led by Qatar and Pakistan to negotiate a deal, while keeping the Strait of Hormuz — which normally carries about one-fifth of the world's oil — effectively closed. US consumer prices rose 4.2% in May from a year earlier, the fastest pace since April 2023, driven almost entirely by energy costs that have climbed 23.5% over the past year.

Oil surges as diplomatic window narrows

Brent crude rose about 3% to $94 a barrel on Wednesday after Trump told reporters the US would "hit them hard again today" and posted on social media that Iran would "pay the price" for taking too long to negotiate. West Texas Intermediate climbed to around $91 a barrel. The war has pushed oil prices up almost 30% since the US and Israel attacked Iran in late February, according to data compiled by Bloomberg.

The national average for gasoline reached $4.15 a gallon, up 39% since the conflict began, AAA data show. Diesel averaged $5.30 a gallon, a 41% increase. The S&P 500 fell 1.6% on Wednesday as investors priced in prolonged disruption, while Asian markets saw steeper declines — South Korea's Kospi dropped 4.5% and Taiwan's Taiex fell 3.3%.

Iran's foreign ministry accused the US of deliberately bombing civilian water infrastructure in the southern Hormozgan province, saying two reservoirs with a combined capacity of more than 660,000 gallons were destroyed, cutting off drinking water for 20,000 people. US Central Command declined to comment on the report but said it had targeted Iranian military assets with "precision munitions."

Cease-fire frays as both sides trade fire

The US military said it has disabled eight non-compliant vessels since April 13, when the Trump administration initiated a naval blockade of ships traveling to or from Iranian ports. Iran responded on Wednesday by launching attack drones against US naval targets in Bahrain and firing missiles at American military facilities in Jordan, both of which were intercepted, according to officials in those countries.

The last time the US and Iran engaged in sustained tit-for-tat strikes during a declared cease-fire was in the 1980-88 Iran-Iraq War's "Tanker War" phase, when both sides attacked commercial shipping in the Persian Gulf. The current standoff has already exceeded that period's duration in terms of blockade-related disruptions, according to shipping data.

A delegation of Qatari officials arrived in Iran on Wednesday to discuss efforts to negotiate a deal, according to a regional official. The International Atomic Energy Agency's board separately voted to demand that Iran provide complete information about its stockpile of enriched uranium and grant inspectors access to nuclear sites — a resolution that adds pressure on Tehran even as military tensions escalate.

Iran's representative to the UN, Amir Saeid Iravani, told the Security Council that Trump should stop threatening Iran. "Iran has never negotiated under threats and pressure, and will never submit to pressure or coercion," he said.

This article is for informational purposes only and does not constitute investment advice.