Trump warns Muscat as he holds out for deal with Iran, global oil stockpiles evaporate

(Originally published May 28 in “What in the World“) Trump’s next target may be Oman.

Trump warned the Gulf state it may face its own U.S. airstrikes if it proceeds with a deal with Iran to run a toll booth for ships traversing the Strait of Hormuz. “Oman will behave just like everybody else, or we’ll have to blow them up,” he said in a cabinet meeting Wednesday.

Oil rose almost 2% after a second day of U.S. strikes on Iran dimmed the outlook for peace talks. But Trump said the rising economic impact of his war on Iran wasn’t affecting his attempts to broker a peace agreement with Tehran, suggesting he would accept nothing less than a complete surrender by Iran of its nuclear weapons program. Israel, meanwhile, is expanding its assaults against the Iran-backed Hezbollah militia in southern Lebanon. And Kuwait said it had been attacked with drones and missiles.

Even as global oil stockpiles dry up, energy-import dependent Europe is enduring a record-setting heat wave. HFI Research said last week the market had “reached the point of no return,” and investment bank Piper Sandler added its voice to those predicting a summer spike in oil prices, writing in a research note to clients: “We think the Strait of Hormuz remains largely closed for months yet, meaning shortages become more urgent and oil hits new highs this Summer.”