(Bloomberg) -- Oil prices rose after President Donald Trump threatened attacks on Iran’s energy infrastructure, overshadowing his comments that a deal to end hostilities in the Middle East could be close.

West Texas Intermediate futures rose more than 3% to trade near $103 a barrel, while the most active June Brent futures climbed to trade above $107 a barrel.

Brent futures were volatile amid thin liquidity, with traders increasingly staying on the sidelines to avoid extreme headline-driven price swings. Front-month May futures fluctuated as investors closed out those positions ahead of the contract’s expiration on Tuesday — the price was near $112 a barrel.

In a Truth Social post, Trump said that if a deal with Iran isn’t reached shortly and “if the Hormuz Strait is not immediately ‘Open for Business,’ we will conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island.”

Crude prices were also supported after more US troops arrived in the region and the Iran-backed Houthi militants in Yemen entered the war. So far the conflict has all-but blocked the Strait of Hormuz, and traders are warning that an even bigger increase in energy prices is on the way if the conflict doesn’t end soon.

Brent has surged around 60% in March as the war between the US, Israel and Iran upended global markets and triggered concern about a simultaneous spike in inflation and slowdown in growth. The conflict has entered its fifth week and is showing no sign of abating despite a diplomatic push by Washington last week and separate peace talks over the weekend in Pakistan.

Market disruption is centered on the Strait of Hormuz, through which about a fifth of the world’s oil flows in normal times. The conflict has also sent shockwaves across the global market as fuel prices soar.

“Four weeks in, the impact of the effective Hormuz closure is now spreading through the oil market,” Morgan Stanley analysts including Martijn Rats and Charlotte Firkins said. “The cumulative losses are now large enough to matter in end-use markets.”

On Sunday, Trump told reporters on Air Force One that Iran “gave” the US most of the 15 demands it sent to Tehran for an end to the war, declining to specify the concessions offered. Iran previously publicly rejected the plan, countering with conditions including maintaining sovereignty over the Strait of Hormuz.

Iran has choked off all but a fraction of the traffic passing through the waterway that links the Persian Gulf to global markets. Tehran has moved to formalize its control of the artery, barring most vessels, while allowing a handful to pass, including from Pakistan, Thailand and Malaysia. In a symbolically significant move, two state-owned Chinese container ships were trying to exit Hormuz on Monday.

Treasury Secretary Scott Bessent said in an interview Monday on Fox News that the US is going to retake control of the Strait over time, and there will be freedom of navigation — whether it is through US escorts or a multinational escort.

Still, traders remain concerned that naval escorts may not immediately make the Strait safe to sail through.

“Their talk-down-of-the-day tactic is growing old,” said Darrell Fletcher, managing director for commodities at Bannockburn Capital Markets.

The involvement of the Houthis also presents a new risk for crude markets. The group effectively shut the Red Sea to most Western shippers after war in Gaza began in 2023, forcing vessels to reroute. Any threats to cargoes loaded via Saudi Arabia’s Yanbu port would further constrain supplies.

Banks have been scrambling to calculate how the war — and prices — may evolve. Macquarie Group Ltd. said last week futures may hit $200 a barrel if the conflict drags on till June and Hormuz stays shut in a scenario with 40% odds.

The fallout from the war is rippling across the Asia-Pacific. South Korea may widen restrictions on driving to include the general public if prices breach $120 a barrel — the first such move since the 1991 Gulf War. Australia will halve its fuel excise for three months, while Vietnamese airlines will cut flights from April on concerns around jet fuel constraints and higher prices.

G-7 countries said they are ready to take all “necessary measures” to preserve the stability of the energy market, which traders interpreted as potential additional oil releases.

“If nothing changes in the next month we’re walking in to a serious energy crisis,” said Toby Copson, a China-based portfolio manager at Davenport Energy, which trades oil and gas. “I sound hyperbolic, but it’s appearing tangible now.”

--With assistance from Rong Wei Neo, Rob Verdonck and Charles Gorrivan.

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