Trump’s Iran war speech paints a grim picture for oil markets with more than 600 million barrels at risk

President Donald Trump has doubled down on the U.S. war against Iran, spiking oil prices Thursday as traders prepare for a longer conflict that will exacerbate the already deep disruption to global energy supplies.

The oil market had hoped Trump would present a clear exit strategy during his national address Wednesday night. Instead, the president said the war will continue for weeks and vowed to hit the Islamic Republic “extremely hard.”

“With the conflict now expected to last at least into deep April, the barrel math becomes increasingly grim,” said Ryan McKay, senior commodity strategist at TD Securities, in a Thursday note to clients.

Nearly 1 billion barrels will be lost by the end of the month, including up to 600 million barrels of crude oil and roughly 350 million barrels of refined products like jet fuel, diesel and gasoline, McKay said. Every month the war drags on will see an additional combined loss of 450 million barrels, he said.

Rapidan Energy forecasts a total net loss of 630 million barrels of oil and products by the end of June when accounting for redirected flows through pipelines, emergency stockpile releases, and inventory drawdowns.

U.S. crude oil prices have soared more than 10% to top $110 per barrel in the aftermath of Trump’s remarks. Brent prices, the international benchmark, jumped more than 6% to top $107.

Buyers of physical barrels of U.S. oil are willing to pay nearly $120 in Houston at the moment or a premium of about $5.50 over the May futures contract, said Tom Kloza, an independent oil analyst at Kloza Advisors.

“The speech was a disaster,” John Kilduff, founding partner at Again Capital, told CNBC. The market is rapidly pricing in the impact of a prolonged war and closure of the Strait of Hormuz, he said.