Oil prices surged following a televised address by U.S. President Donald Trump, who warned he would strike Iran ‘extremely hard’ over the coming weeks, according to the BBC. Brent crude briefly surpassed $109 a barrel, while global stock markets fell in response to the rhetoric.

Escalating Tensions in the Middle East

Trump stated that the U.S. would complete its strategic objectives in the Middle East ‘very shortly’ and spend the next two to three weeks bombing Iran ‘back to the Stone Ages.’ The Iran war has already disrupted global oil and gas supplies, with shipments through the critical Strait of Hormuz largely halted after Iran threatened to attack tankers crossing the waterway in retaliation to U.S.-Israeli strikes that began on 28 February.

In his speech, Trump said the U.S. did not need the Middle East’s energy and urged other nations to step in to free up shipments from the Gulf. ‘To those countries that can’t get fuel, many of which refuse to get involved in the decapitation of Iran… build up some delayed courage, go to the Strait and just take it,’ he said.

Market Reactions to Trump’s Rhetoric

Oil prices, which had been fluctuating incrementally before, shot upwards moments after the speech. Brent crude, the global benchmark, rose more than 8% on Thursday before retreating slightly. The U.S. benchmark, West Texas Intermediate, also took off, briefly trading above $110 a barrel in New York before dropping back a bit.

‘The rise was a clear market reality check following the earlier optimism for an imminent ceasefire,’ said Alberto Bellorin, founder and managing director at InterCapital Energy. Trump’s speech lacked a ‘concrete timeline’ for the reopening of the Strait of Hormuz, while a return to normal now looks ‘months away rather than weeks,’ he added.

In urging other nations to step in, Trump has removed hopes that disruptions to global energy supplies will be resolved swiftly, Bellorin said. In his speech, Trump said oil and gas flows would return quickly when the war ended. ‘When this conflict is over, the strait will open up naturally. It will just open up naturally,’ he said.

Long-Term Implications for Energy Infrastructure

However, Anne-Sophie Corbeau, former head of gas analysis at BP, suggested it could take some time for flows to return to normal. The Gulf’s energy infrastructure has been damaged following strikes by Iran, Israel, and the U.S., and Corbeau said repairing it could take between three and five years.

Corbeau, who is now at the Center on Global Energy Policy at Columbia, told the BBC’s Today programme that disruption to traffic through the Strait of Hormuz was likely to persist. She said additional costs in the form of fees to use the strait could be ‘quite substantial.’ Currently, ships are subject to a charge in the region of $2 million for using the strait, which, if made permanent, would amount to ‘the worst-case solution’ for users of the waterway.

In the U.S., the S&P 500 and Nasdaq closed slightly higher, up 0.1% and 0.2% respectively after earlier losses. The Dow Jones Industrial Average ended trading down 0.1%. In the UK, the FTSE 100 index fell in early afternoon trade but closed 0.69% higher. France’s Cac index closed down 0.24%, and Germany’s Dax closed down 0.79%—both regaining some earlier falls.

In Asia, major stock indexes fell after Trump’s address, reversing earlier gains. Japan’s Nikkei 225 closed down 2.4%, and South Korea’s Kospi ended 4.5% lower. The region’s stock markets have been volatile since the Iran war began. Asia is particularly vulnerable to the impact of the conflict as it is heavily reliant on the Middle East for its energy supplies.

Brent crude prices jumped by as much as 8% on Thursday to $109.74 a barrel, reversing Wednesday’s drop when hopes of a de-escalation in the Iran war pushed the international benchmark below the $100-a-barrel mark at one point. In a separate report, oil prices have soared after Trump vowed to hit Iran ‘extremely hard’ over the coming weeks, knocking hopes of a near-term end to the conflict in the Middle East.

The cost of oil produced in the U.S. also jumped, with a barrel of West Texas Intermediate rising by 11% to $111.60 a barrel, over the $110 mark for the first time since 9 March. However, Brent crude later eased to $106.40, up 5% on the day, following a report that Iran and Oman are working on a ‘protocol’ to cover marine traffic in the central Strait of Hormuz shipping channel.