United States President Donald Trump on Tuesday warned that “a whole civilisation will die tonight” if Tehran refuses to comply with Washington’s demand to reopen the Strait of Hormuz.

With hours left on a hard U.S. deadline to Iran, global markets are already reacting to the escalating rhetoric from Donald Trump.

Brent crude is now hovering around $111–112 per barrel, while U.S. benchmark WTI has spiked to roughly $113–116, in some sessions even trading at a rare premium to Brent — a sign of extreme short-term supply stress.

Kharg Island: escalation hits the economic nerve

Hours before the deadline, U.S. forces — with Israeli backing — struck Iran’s Kharg Island, reportedly hitting more than 50 military targets.

Kharg Island handles the overwhelming majority of Iran’s crude exports, making it the single most important node in the country’s oil economy.

Even though oil terminals were not hit, the signal is that energy infrastructure is now within targeting range.

Iran raises the stakes — energy war on the table

Tehran has now indicated it is ready to escalate beyond the battlefield.

“If Washington attacks Iran’s power plants, the entire region and Saudi Arabia will fall into complete darkness,” officials warned, according to local media.

The Islamic Revolutionary Guard Corps (IRGC) has also made clear it will retaliate if civilian infrastructure is targeted.

More critically, Iran has threatened to shut the Bab al-Mandeb Strait — a chokepoint that carries roughly 12% of global seaborne trade.

Such a move would effectively choke global shipping alongside disruptions in the Strait of Hormuz, raising the spectre of oil surging toward $150 per barrel.

“If the U.S. Army crosses red lines, our response will exceed the region’s boundaries,” officials said, according to reports.

This raises the risk of attacks not just in West Asia, but potentially against broader U.S. or allied interests.

Oil reaction: sharp, immediate, and political

Oil had already been climbing, but Trump’s warning accelerated the move.

• Brent climbed past $111

Prices are now up over 50% since the conflict began

The unusual WTI premium over Brent indicates a scramble for non-Middle East supply, especially as the Strait of Hormuz remains disrupted.

Dow futures slip

Unlike oil, equity markets are reacting more cautiously — but the direction is clear.

U.S. stock futures, including Dow futures, edged lower as tensions rose. As of 6:30 pm IST, Dow Futures were trading 187 points lower at 46,715. GIFT Nifty has also slipped despite Indian equities ending higher on Tuesday. 

The drop in futures remains limited for now — partly because markets are still betting that Trump could extend the deadline or pull back at the last moment.

The next few hours to decide

This is now a pure event-driven market.

If Iran complies, oil likely cools fast. If it doesn’t, next targets could include actual oil infrastructure.

Once energy assets are hit, this stops being a regional conflict — and becomes a global economic shock.

Tehran has so far refused to back down. Officials have rejected U.S. demands outright, calling them coercive, and said that retaliation is on the table.