Oil Prices Near $110 as Iran War and Hormuz Crisis Drive Global Supply Fears
TLDR
- Brent crude rose to nearly $110 a barrel and WTI reached $96 as the Iran conflict stretched into April.
- Trump extended a deadline for U.S. strikes on Iranian energy infrastructure to April 6 after what he described as ongoing talks with Tehran.
- Iran publicly denied any negotiations with the U.S. are taking place.
- Around 8 million barrels per day of oil are offline, with the Strait of Hormuz still largely blocked.
- Analysts at Macquarie say a prolonged conflict could push oil to $200 a barrel.
Oil prices are climbing again as the conflict between the U.S., Israel, and Iran continues to disrupt global energy supply. Brent crude rose nearly 2% to $109.92 a barrel on Friday. U.S. West Texas Intermediate also gained, reaching $96.08.
Brent Crude Oil Last Day Financ (BZ=F)
Brent crude is on pace for a record monthly gain in March. It has surged roughly 52% so far this month, making it one of the sharpest monthly rises in recent memory.
The conflict began at the end of February and has led to the near-complete closure of the Strait of Hormuz. That waterway normally carries about one-fifth of all global oil flows.
With the strait mostly shut, around 8 million barrels per day are now offline. Saxo Bank’s head of commodities, Ole Hansen, said the situation is tightening supply fast as ships that already left the Gulf before the blockade have now arrived at their destinations and unloaded.
President Trump extended a White House deadline for Iran to reopen the strait or face U.S. strikes on energy facilities. The new deadline is April 6. Trump said the extension came at Iran’s request and that talks were going well.
Iran denied this through state media. Tehran said no talks with Washington are currently underway.
Continued Attacks and Military Buildup
Military activity has not stopped. Israel said it struck Iran’s main missile and sea mine production facility in Yazd. Kuwait reported drone attacks on two of its ports. Saudi Arabia intercepted drones in its eastern region.
The Pentagon is reportedly considering sending up to 10,000 additional ground troops to the region, including units from the 82nd Airborne Division and Marine Expeditionary Units.
The Trump administration is also reportedly trying to arrange a meeting in Pakistan this weekend involving Vice President JD Vance and other senior officials to explore a possible end to the conflict.
Iran said it rejected a 15-point U.S. peace proposal and submitted its own terms. Those include recognition of Tehran’s control over the Strait of Hormuz.
Inflation Concerns and Market Response
The oil spike is feeding into broader economic concerns. Government bond yields have risen as investors bet that higher energy prices could force central banks to raise interest rates.
The U.S. 10-year Treasury yield climbed to its highest level since July. Yields also rose in Germany and France.
Several countries have moved to soften the blow on consumers. India cut taxes on diesel and gasoline. Vietnam froze fuel levies until mid-April. New Zealand reported signs of fuel hoarding.
Macquarie analysts put the odds of the war extending into June at 40%. If that happens, they say oil could reach $200 a barrel.
Two container ships linked to China’s Cosco Shipping attempted to pass through the Strait of Hormuz on Friday before turning back near Iran.
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