Oil prices soared past $110 per barrel Wednesday morning as President Donald Trump announced plans for continued military strikes against Iranian targets, rejecting diplomatic calls for a ceasefire in the escalating Middle East conflict.
West Texas Intermediate crude futures jumped 8.3 per cent to $112.45 per barrel in early trading, marking the highest level since 2023, while Brent crude climbed to $115.80. The surge followed Trump's televised address Tuesday evening in which he declared "maximum pressure will continue" against Iran's military infrastructure.
"We will not negotiate with terrorists," Trump told reporters at the White House. "Iran's proxies have crossed every red line, and America will respond with overwhelming force until they surrender unconditionally."
Energy markets reacted swiftly to the escalating rhetoric, with analysts warning that sustained conflict could disrupt critical shipping lanes through the Strait of Hormuz, through which roughly 20 per cent of global oil passes daily. Iranian officials have previously threatened to close the strategic waterway if attacked.
Calgary-based energy companies saw immediate gains on the TSX, with Suncor Energy rising 12 per cent and Canadian Natural Resources climbing 9 per cent in morning trading. Industry experts predict the price surge could significantly boost Alberta's oil sector revenues after years of subdued commodity prices.
"This geopolitical premium is exactly what Alberta's energy sector needed," said petroleum analyst Sarah Martinez from RBC Capital Markets. "If oil sustains above $100, we're looking at a potential renaissance for Canadian oil sands operations."
The conflict began escalating last week when Iranian-backed militias launched coordinated attacks on U.S. bases across Iraq and Syria, prompting retaliatory airstrikes from American forces. Intelligence reports suggest Iran has been mobilizing additional proxy forces throughout the region.
European leaders called for immediate de-escalation Wednesday, with French President Emmanuel Macron warning that "the world cannot afford another prolonged Middle East war." However, Trump dismissed international pressure, stating that "weakness invites aggression."
Financial markets beyond energy showed mixed reactions, with gold prices climbing to $2,180 per ounce as investors sought safe-haven assets. The U.S. dollar strengthened against major currencies, while stock indices remained volatile amid uncertainty over economic impacts.
Iran's Revolutionary Guard Corps issued a statement Wednesday threatening "devastating consequences" for any nation supporting U.S. military operations, raising concerns about potential attacks on oil infrastructure across the Gulf region.
Energy analysts project that sustained oil prices above $110 could add inflationary pressure to the global economy, potentially forcing central banks to reconsider monetary policy. The situation remains fluid as diplomatic efforts appear stalled with no clear path toward resolution.