Oil prices surged back above $100 a barrel on Monday, climbing more than 7%, after US President Donald Trump ordered a blockade of Iranian ports following the collapse of peace talks between Washington and Tehran.
Brent crude, the international benchmark, reached $102.02 a barrel (£75.91) before retreating to $98 during Monday afternoon trading in the US. This surge follows a significant drop below $100 last Wednesday, when the US and Iran had agreed to a conditional two-week ceasefire, which included reopening the Strait of Hormuz, a critical shipping lane for global oil and gas supplies.
The breakdown of negotiations has intensified concerns about a deepening global energy crisis. The Strait of Hormuz, through which a fifth of the world’s energy shipments pass, has become a focal point of the conflict. Iran had previously threatened to attack vessels attempting to use the waterway in retaliation for US-Israeli strikes.
Shipping activities have largely been halted since the US-Israel war with Iran began on February 28, leading to a worldwide surge in energy prices and increased costs for consumers, particularly for petrol and diesel.
Despite the conflict, Iran has continued to export oil. Maritime intelligence firm Windward reported that over 58 million barrels of oil have been shipped from Kharg Island, Iran’s primary crude export terminal, since March 1. More than 90% of these exports were reportedly destined for China.
On Sunday, President Trump declared that “effective immediately,” the US Navy “will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz.” US Central Command later clarified that it would block all vessels entering and exiting Iranian ports and coastal areas within the Strait starting Monday at 10:00 EST (15:00 BST). The blockade, however, would not apply to ships transiting the Strait of Hormuz to and from non-Iranian ports.
In response, the Unified Command of Iranian Armed Forces stated on Monday that US restrictions on vessels in international waters were “illegal and constitutes piracy.” It added that Iran would establish a “permanent mechanism to control the Strait of Hormuz following US threats.”
China has urged all parties to exercise restraint. A spokesperson for China’s foreign ministry emphasized, “The Strait of Hormuz is an important international trade route for goods and energy, and maintaining its security, stability and unimpeded flow is in the common interest of the international community.”
Neil Shearing, group chief economist at Capital Economics, suggested that Trump’s blockade might be “designed to pressure Beijing into playing a more active role in mediating a ceasefire and reopening full trade flows through the Strait.”
A line chart illustrating Brent crude oil prices from February 23 to April 8, 2026, showed the price opening at approximately $71 on February 23. It rose to about $78 on March 2 after US and Israeli attacks on Iran. Prices then fluctuated upwards, peaking around $119 on March 31, before settling at $95 by 09:00 (BST) on April 8. (Source: Bloomberg)
Chua Yeow Hwee, an economist from Singapore’s Nanyang Technological University, commented, “Oil prices are likely to remain elevated because expectations now depend on whether the blockade is fully implemented, whether shipping disruptions spread, and whether diplomacy resumes.”
Analyst Saul Kavonic from MST Marquee told the BBC that “oil prices are not as high as they normally would be” given the scale of supply disruption, as traders still anticipate a swift resumption of shipments. “But if that doesn’t happen, oil prices will head higher,” Kavonic warned.
David Satterfield, former Special Envoy for Middle East Humanitarian Issues, highlighted that the Strait of Hormuz transports more than just oil and gas. He noted to the BBC’s Today programme that it accounts for “about 30% of the world’s aluminium, 30% of the world’s helium, up to 50% of the feed stocks for fertilizers around the world and about 17% of all polymers.” He cautioned, “The impact, if this goes on for several more weeks, is going to become quite profound beyond the cost of petrol and diesel at the pump.”
Marcus Baker, global head of marine and cargo at risk insurance firm Marsh, raised the question of the ceasefire’s durability. “Will the Iranians decide that actually, despite what the US has said, they will continue to honour the ceasefire?” he pondered. “Clearly, if that happens we will get much more confidence coming back into the market and I think the durability of that ceasefire is really critical to what happens next.”
European stock markets pared earlier losses but remained down at midday. The UK’s FTSE 100 dropped 0.35%, France’s Cac index fell 0.8%, and Germany’s Dax index declined 1%. Major Asian stock indexes closed lower, with Japan’s Nikkei 225 down 0.7% and South Korea’s Kospi falling 0.9%. Asian countries, heavily reliant on Middle Eastern oil, have been particularly affected by the Iran conflict. US stocks opened lower on Monday but recovered to close slightly up, with the Dow Jones Industrial Average rising 0.2%, the Nasdaq climbing 0.8%, and the S&P 500 increasing by 0.6%.
The Strait of Hormuz is a narrow waterway situated between Iran, the United Arab Emirates (UAE), and Oman. At its narrowest point, it is approximately 21 miles (33 km) wide, connecting the Persian Gulf to the Gulf of Oman, making it a crucial global shipping route. Approximately 20% of the world’s oil and liquefied natural gas typically transits through the Strait of Hormuz. This includes oil from Iran, as well as other Gulf states like Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE. In 2025, an estimated 20 million barrels of oil passed through the waterway daily, according to the US Energy Information Administration (EIA), representing nearly $600 billion (£447 billion) in annual energy trade.
#OilPrices #StraitOfHormuz #USIranConflict #EnergyCrisis #GlobalEconomy #CrudeOil #Geopolitics #ShippingDisruption #MiddleEast #MarketImpact
Leave a Reply