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(Bloomberg) -- Oil rose as US President Donald Trump signaled that an escalation in strikes on Iran could come as soon as Tuesday, heightening fears that imminent military action will derail tentative progress toward restoring energy flows through the crucial Strait of Hormuz.

West Texas Intermediate swung in a roughly $6.60 range before ultimately settling up 0.8% at above $112 a barrel. Trump said that Iran might be “taken out” by Tuesday night if no deal is achieved. That came just after the Wall Street Journal reported the US military is making preparations for potential strikes on energy targets in Iran. The US leader has repeatedly threatened such action.

“I mean complete demolition by 12 o’clock, and it’ll happen over a period of four hours,” Trump told reporters on Monday.

The one-two punch inflamed fears that the next stretch of fighting may cause hard-to-reverse damage to critical infrastructure and further disrupt shipping traffic in the region. Prices later eased after Trump said that reopening the Strait of Hormuz — the chokepoint for about a fifth of world’s oil and liquefied natural gas shipments — was “a very big priority.”

At the same time, traffic through the waterway has climbed to its highest levels since the early days of the US-Israel war on Iran. The prospect of increased flows, even though they remain below normal levels, has helped unwind some of the risk premium embedded in prices. Still, any progress remains fragile.

“Ships might be moving, but the question is are oil tankers moving,” said John Kartsonas, founding and managing partner at commodity trading firm Breakwave Advisors LLC. “In terms of oil, very few non-Iranian tankers have transited the strait. Personally, I don’t see that anything has changed meaningfully.”

The oil market is racing against time, with the critical waterway largely blocked for over a month. Prices of some barrels, from crude to jet fuel, have soared, in what the International Energy Agency is calling the biggest supply disruption ever. The longer the war continues, the higher prices are likely to go, likely triggering a ripple inflationary effect.

Iran earlier rejected a latest ceasefire proposal, countering with demands that include the permanent lifting of sanctions and reconstruction efforts, among others, the state-run Islamic Republic News Agency reported. The development did little to shift investor sentiment, though, as many were skeptical that the last-minute push for peace would succeed.

As the war grinds on, there are other signs of concern about near-term supply. WTI’s prompt spread — the difference between its two nearest contracts — traded at one point traded near $15.50 a barrel on Monday, close to the biggest premium on record. The widening was ushered in by firming expectations of tighter US supplies as overseas buyers rush to buy American crude.