Global energy markets plunged into volatility during early Asian trading on Monday, driven by escalating U.S.-Iran tensions over the Strait of Hormuz.
U.S. President Donald Trump’s aggressive Sunday social media ultimatum—demanding Iran reopen the vital waterway by late Tuesday or face strikes on its power plants and bridges—sent oil prices on a rollercoaster ride.
Brent crude futures rocketed past $110 per barrel in initial reaction, reflecting fears of prolonged disruption in the 33km-wide chokepoint that normally channels 20% of the world’s oil and a third of its liquefied natural gas.
Gains eased slightly after reports emerged of possible U.S.-Iran ceasefire talks. Axios cited U.S., Israeli, and regional sources discussing a 45-day truce that could end hostilities. By Asian midday, Brent climbed 0.7% to $109.80, while West Texas Intermediate held steady near $111.62.
Tehran’s blockade, retaliation for U.S. and Israeli airstrikes since late February, has crippled Middle East shipments, echoing the 2019 tanker crisis that slashed flows and hiked premiums. The standoff has propelled Brent from $85 in January to triple digits, with last week’s surge past $100 tied to Trump’s intensified rhetoric warning of devastating blows to Iran.
Iran claimed weekend strikes on refineries in Kuwait, Bahrain, and the UAE, while its IRGC threatened fiercer action against U.S. assets. OPEC+ approved a 206,000 barrels-per-day May output rise, but key members like Iraq and the UAE are hamstrung by the conflict, limiting Saudi spare capacity to 1.5 million bpd per IEA figures.
JPMorgan forecasts Brent could hit $120 if disruptions persist, exacerbating stagflation risks as U.S. petrol averages $5.20 per gallon and European benchmarks jump 15%. Global supply strains continue to dominate trader focus, with every diplomatic whisper or military update poised to jolt prices further.