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Oil rose above $95 a barrel on Wednesday, its highest level in six weeks, after Donald Trump threatened a new escalation of the Iran war and warned the US would soon launch an attack on a heavily fortified nuclear site.
The president’s threat comes amid a flare-up in the nearly five-month conflict between Washington and Tehran that has driven oil prices 30 per cent higher since the start of July. The US struck Iran for the 11th straight night on Tuesday.
Trump said he thought Iran “may have” moved components critical to building a nuclear weapon to a deeply buried facility beneath Kolang Gazla — known as Pickaxe Mountain — in central Iran.
“We’ll be hitting that area pretty soon, and very heavily,” he said on Tuesday in the Oval Office during a meeting with Lebanon’s President Joseph Aoun.
Brent crude was more than 4 per cent higher at $95.24 a barrel on Wednesday, the highest level since June 11.
Trump’s vow for fresh military action comes at a time of mounting anxiety among oil traders, with crude transits through the Strait of Hormuz having slowed to a trickle in recent days and global inventories dwindling to critically low levels.
The administration has faced growing pressure over its strategy and the costs of the protracted conflict.
US defence secretary Pete Hegseth on Tuesday said the Pentagon estimated the cost of the war at $37.5bn, as he testified before Congress for the first time since military hostilities between Washington and Tehran resumed two weeks ago.
That figure does not include the costs of rebuilding US military installations damaged by Iranian attacks.
The White House has requested about $67bn in supplemental funding to cover the war’s costs. Current and future troop training “would have to be curtailed if we do not get our budget needs met and met urgently”, Hegseth told senators.
Testifying alongside Hegseth, General Dan Caine, chairman of the Joint Chiefs of Staff, declined to say whether Washington would escalate the conflict further.
Asked whether air strikes alone would deter and defeat Iran, Caine said that historically “air power’s got limits”.
Tuesday night’s wave of strikes — the 15th in two weeks — “targeted Iranian military operations centres, maritime capabilities, aircraft hangars, drone storage facilities, and military logistics infrastructure”, said US Central Command, which oversees American military operations in the Middle East.
The prospect of a longer conflict has added pressure to the oil price. Goldman Sachs late on Monday warned that Brent crude could soar to $120 a barrel if the Strait of Hormuz, which carried a fifth of the world’s oil before the war, remained “disrupted” by the fourth quarter of this year.
At least seven ships have been hit in the strait since the breakdown of the ceasefire, with Iran targeting vessels that have attempted to transit through the waterway by hugging the Omani coastline, which is largely protected by US air cover.
Of the 15 crossings recorded by the maritime intelligence company Windward on Monday, all but two sailed through the strait via a route laid out by Iran. The two using the Omani route — tankers operated by the Greek company Dynacom — were hit by Iranian missiles.
Trump has repeatedly claimed to have “eradicated” Iran’s nuclear programme during a 12-day offensive by the US and Israel in June 2025 that targeted sites including Natanz and Fordow.
But neither military struck the heavily fortified underground tunnel facility under construction at Pickaxe Mountain.
The facility, a few kilometres south of Natanz, is harder to hit than Fordow because it is deeper and better protected. It is also not as well mapped.
Pickaxe has at least four tunnels, compared with Fordow’s two, making it more difficult to bomb the entrances to close them. Their depth could put them out of reach of the 30,000lb “bunker-buster” bombs the US used against Fordow last year.
Asked on Tuesday whether the US had the ability to destroy whatever was under Pickaxe, Hegseth said: “A lot of our capabilities are classified. But if anybody in the world can reach anything on God’s green earth, it’s the United States military, the most powerful military in the world. It’s all about options and trade-offs.”
Trump last week threatened to “take out” the site during an interview with the conservative podcast host Hugh Hewitt. The facility was a “target for a nice, big, fat shot right into the front door”, he added.
Iran’s Khatam al-Anbiya Central Headquarters warned any new US attack on the country’s nuclear facilities would be regarded “as an expansion of the war in the region”.
Tehran has stepped up its attacks on US allies in the Gulf in recent weeks since an April ceasefire collapsed. On Tuesday, the war widened further as Yemen’s Iran-backed Houthi rebels declared they would impose a “maritime embargo” against Saudi Arabia’s ports.
Four US military service members have been killed in recent days of fighting in the Middle East.
