Hormuz closure raises odds of $100 oil, analysts warn

• Strait closed again on Saturday
• High odds of oil reaching $100
• $50bn of production lost so far

Oil prices may jump above $100 per barrel after Iran announced the reclosure of the Strait of Hormuz, say analysts.

The strait closed again on Saturday afternoon and will remain so until the US removes its blockade on Iranian ships, according to Iranian media reports. 

This was after Iran’s foreign minister Seyed Abbas Araghchi announced on Friday that all commercial vessels would be able to pass through the critical waterway until April 26.

“The odds of US oil prices surging back above $100/barrel this month surge to 44% as Iran closes the Strait of Hormuz again,” markets commentator The Kobeissi Letter said in a post on X.

The oil and global stock markets will open for trading on Monday.

In another post, it said that “we are now witnessing the largest energy supply disruption in modern history. Since the start of the Iran War on February 28 more than 500 million ​barrels of crude and condensate have been removed from the global market.”

“In other words, global supply has now lost $50 billion ​worth of crude oil production since the Iran war began nearly 50 days ago. This is the same amount of fuel it takes to run the world’s international shipping industry for 4 months,” the post said.

Last week the International Energy Agency said the conflict with Iran was the “largest disruption in history” that “thoroughly upended the global outlook for oil consumption”. 

After Friday’s announcement that the strait had reopened Brent crude prices plunged by 11 percent to around $89 a barrel, while the US benchmark West Texas Intermediate declined by 12 percent to $84 shortly after.

In a post on Sunday morning, energy investment research site HFI Research said that tanker activity initially surged, but the traffic has dried up after the Islamic Revolutionary Guard Corps enforced the closure. 

The UK Navy reported on Saturday that Iran fired at some ships attempting to cross the strait. Some merchant vessels received radio messages from Iran’s navy saying the strait was shut again and that no ships were allowed to pass, shipping sources told Reuters.

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The US Central Command said on X that the blockade has completely halted economic trade going into and out of Iran by sea.

Brent crude prices have surged by as much as 51 percent since the start of the conflict, peaking at more than $119 a barrel in March.

More than 20 percent of the world’s oil and gas supplies pass through the narrow strait. 

A 10-day ceasefire between the Lebanese group Hezbollah and Israel began on Thursday night.

A tenuous ceasefire between the US-Israel and Iran has been in place since April 8.