Oil Gains as U.S. Blocks Hormuz; Trump Says Iran Reached Out
Oil prices rose after the U.S. blockade of Iranian ports raised the risk of tighter global supply, although gains were capped by signs that ceasefire diplomacy may still be in play.
Brent climbed 4.4% to settle at $99.36 a barrel, while West Texas Intermediate (WTI) for May delivery added 2.6% to settle at $99.08. Significant questions remain over how a U.S. naval blockade around the Strait of Hormuz will be implemented and enforced, but the move tests a fragile ceasefire and could restrict one of the few remaining Gulf oil flows that continued during the nearly seven-week war.
Even so, futures settled near intraday lows, reflecting thin liquidity and sharp headline-driven swings as trading costs rise. The day’s advance was limited after President Donald Trump claimed Iran wants to “work a deal” following the collapse of weekend peace talks. Tehran did not confirm any renewed discussions on Monday.
The blockade of Hormuz — a critical energy chokepoint — prompted fresh threats from Iran to target vessels and ports in response, amplifying risks for other regional producers. Energy markets have been upended by the conflict, with higher prices raising inflation risks while also weighing on economic growth. While futures ended last week near $95 a barrel, physical oil gauges were more than $30 above that level as buyers scrambled globally for prompt cargoes.
The head of the International Energy Agency said current prices do not yet reflect the full severity of the supply crisis, but warned they soon will. More than 80 energy facilities have been damaged during the hostilities, and recovery could take up to two years.
“The paper market that we’re seeing right now … is looking through the conflict to resolution and barrels being back on the market in fairly short order,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group on Bloomberg TV. “The reality … is probably a much longer timeline, even if we get those barrels moving tomorrow.”
Since the U.S. and Israel launched the campaign in late February, the Trump administration has repeatedly tried to calm prices, including coordinating the largest-ever release from emergency reserves and previously easing some restrictions on Iranian oil at sea. Still, both benchmarks remain near $100.
Trump framed the blockade as another attempt to force Iran to loosen its leverage over Hormuz, through which about a fifth of global oil and liquefied natural gas typically transits. Since the blockade began, two tankers appear to have abandoned transits after a U.S. deadline to leave Iranian waters passed. Under the new regime, vessels entering or leaving the restricted zone may be subject to interception, diversion, or capture.
Iran’s armed forces said port security in the region is “either for everyone or for no one,” according to state-run IRIB, calling the U.S. move “an act of piracy” and reiterating its aim to retain control over the waterway even after the war. Analysts also warned that if Tehran believes its exports are threatened, it could push Houthi forces in Yemen to disrupt shipping at Bab el-Mandeb — another critical chokepoint at the southern entrance to the Red Sea, according to Mona Yacoubian, director of the Middle East Program at CSIS.
Source : Newsmaker.id
