Oil Rebounds Above $70 as Trump Warns Iran of Annihilation Ahead of Doha Negotiations

Crude oil prices managed to recover past the $70 per barrel threshold on Monday, June 29, following a turbulent weekend marked by a fresh series of military exchanges between the United States and Iran centered around the Strait of Hormuz. The rebound came even as both nations signaled a temporary halt to hostilities and agreed to return to diplomatic discussions.

West Texas Intermediate futures gained 1.3%, reaching $70.17, while Brent crude climbed to $73.21. Both major benchmarks had previously slumped to their weakest positions since late February by Thursday, June 25, just before the renewed cycle of strikes commenced.

A Timeline of Weekend Escalations

The latest flashpoint was ignited on June 25, when Iran's Islamic Revolutionary Guard Corps (IRGC) carried out a drone strike targeting 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 only days after the United Nations had initiated an evacuation plan for hundreds of ships stranded in the region.

In response, US forces launched retaliatory strikes against Iranian military installations on June 26. The IRGC retaliated the following day, striking American forces stationed in Bahrain with drone attacks on June 27. Washington conducted another round of strikes against Iran that same day. By June 28, Iranian forces had extended their targeting to US positions in both Bahrain and Kuwait.

President Donald Trump issued a stark warning via Truth Social, revealing that American aircraft had struck Iranian missile and drone storage facilities, accusing Tehran of violating the existing ceasefire agreement once again. In his post, Trump went as far as threatening the complete elimination of the Islamic Republic of Iran if further military action becomes necessary — a statement that sent shockwaves through global markets and diplomatic circles alike.

Markets Navigate the Line Between Conflict and Diplomacy

Despite the alarming rhetoric, a US official confirmed to Reuters that both parties had agreed to temporarily stand down, with commercial vessels now permitted to transit the strait freely. Technical-level negotiations were scheduled to take place in Doha on Tuesday, offering a potential diplomatic off-ramp.

However, Iran's Foreign Minister Abbas Araghchi maintained a firm stance, insisting that Tehran holds exclusive authority over traffic management through the Strait of Hormuz and has no intention of relinquishing that control.

Shipping data painted a clear picture of the disruption caused by the escalation. Only 48 vessel transits were recorded through the Hormuz strait between June 26 and June 28, a significant drop from the 70 transits logged on the Wednesday preceding the outbreak of hostilities.

A Familiar Pattern in Oil Markets

Energy market observers have noted a recurring dynamic throughout the month: oil prices react sharply to signals of conflict, yet respond with little movement when diplomatic progress is reported. This asymmetry reflects deep market skepticism about the durability of any ceasefire arrangements in the region.

With Tuesday's Doha talks now serving as the next critical test, the central question remains whether the United States and Iran can reach a workable agreement over control of one of the world's most strategically vital waterways. The outcome will likely dictate oil's next major directional move.