Oil back above $100 as US to blockade Iranian ports after peace talks fail
Oil Prices Climb Past $100 Amid U.S.-Iran Blockade Threat
Asian energy markets reopened on Monday, pushing oil prices back above $100 per barrel. The U.S. and Iran’s peace discussions ended without agreement, prompting President Donald Trump to announce plans for a port blockade. Global benchmark Brent crude climbed 7.3% to $102.30, while West Texas Intermediate rose 8.7% to $104.94. Analysts warn the stalemate could worsen the ongoing global energy crisis.
Strait of Hormuz as Central Conflict Point
The Strait of Hormuz, a vital route for a fifth of the world’s oil transport, has become a focal point of the Iran-U.S. standoff. After Tehran retaliated against U.S.-Israeli strikes, it threatened to disrupt shipping through the waterway. Since the conflict began on 28 February, maritime activity has stalled, though India and Malaysia secured safe passage for their vessels.
“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,” said economist Chua Yeow Hwee from Singapore’s Nanyang Technological University.
Asian stock indexes dipped on Monday, with Japan’s Nikkei 225 falling 0.7% and South Korea’s Kospi dropping 1%. The region is particularly vulnerable to the fallout from the Middle East tensions due to its heavy reliance on oil imports. U.S. stock futures also signaled a likely decline in Wall Street trading.
Analyst Saul Kavonic of MST Marquee noted that oil prices have “rewound” to pre-ceasefire levels. “The truth is, oil prices are not as high as they normally would be,” he explained. “But if that doesn’t happen, oil prices will head higher.”
U.S. Blockade Implementation Details
Trump declared on Sunday that the U.S. will block all ships attempting to enter or exit the Strait of Hormuz. U.S. Central Command (Centcom) confirmed the blockade would begin at 10:00 ET on Monday, targeting vessels from any nation. However, Centcom stated it will not interfere with ships traveling to and from non-Iranian ports.
The U.S. and Iran had previously agreed to a conditional two-week ceasefire, which included reopening the strait. Oil prices had dropped to around $90 a barrel on 8 April following that deal, but volatility resurfaced as doubts emerged about its sustainability and ongoing Israeli strikes in Lebanon.
“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,” said economist Chua Yeow Hwee from Singapore’s Nanyang Technological University.
Iranian parliamentary speaker Mohammad Bagher Ghalibaf, who negotiated on behalf of Tehran in Pakistan, stated the country “will not submit to any threat.” The Islamic Revolutionary Guard Corps (IRGC) Naval Forces emphasized that military ships approaching the strait would be seen as breaking the ceasefire and “dealt with severely.”