Crude oil futures climbed sharply on Monday as traders grappled with the deepening risk of prolonged supply shortages stemming from the U.S.-Israeli war with Iran, now in its sixth week.
Brent crude, the global benchmark, rose $1.71, or 1.6 percent, to $110.74 a barrel by 0057 GMT. U.S. West Texas Intermediate crude gained a more modest $0.71, or 0.6 percent, trading at $112.25 per barrel. The gains extended a blistering rally seen late last week, when markets were last open before the Good Friday holiday.
On Thursday, WTI surged more than 11 percent and Brent climbed nearly 8 percent — their largest absolute one-day price jumps since 2020 — after President Donald Trump vowed to press ahead with military operations against Iran.
The war, which erupted with U.S. and Israeli strikes on Feb. 28, has seen Iranian forces launch repeated attacks on shipping in the narrow Strait of Hormuz. The waterway, which funnels oil and petroleum products from major producers including Iraq, Saudi Arabia, Qatar, Kuwait and the United Arab Emirates into global markets, remains largely closed. Roughly one-fifth of the world’s seaborne oil trade normally passes through this strategic pinch point; its blockage has sent shockwaves through refiners worldwide.
With Persian Gulf cargoes stalled, buyers are scrambling for replacement barrels. Refiners in the United States and Europe’s North Sea region have emerged as prime alternatives, triggering aggressive bidding for physical crude from the U.S. Gulf Coast. “Global buyers are bidding aggressively for (U.S.) Gulf Coast barrels and Brent is rallying even faster,” the Schork Group, a prominent energy consultancy, noted in a client advisory on Monday.
The latest price surge comes against a backdrop of heightened geopolitical tension. On Easter Sunday, President Trump escalated his rhetoric in a profanity-laced social media post, warning Tehran that the United States would strike Iranian power plants and bridges as early as Tuesday unless the Strait of Hormuz is reopened to commercial traffic. The threat underscored Washington’s determination to restore the flow of oil, even as the conflict shows no immediate signs of abating.
Shipping data indicate that limited traffic has continued. An Omani-operated tanker, a French-owned container ship and a Japanese-owned gas carrier successfully transited the strait since Thursday, according to tracking information. Analysts say this reflects Iran’s selective policy of allowing passage to vessels from nations it considers “friendly,” while continuing to target others linked to the U.S. or its allies.
Diplomatic efforts to end the fighting have hit a wall. Iran has formally notified mediators that it will not attend planned talks with U.S. officials in Islamabad in the coming days, the Wall Street Journal reported Friday. Ceasefire negotiations, already fragile, have reached a dead end.
In a bid to signal market stability, OPEC+ — the alliance of OPEC members and allies including Russia — agreed on Sunday to a modest production increase of 206,000 barrels per day for May. But the decision is largely symbolic. Several key producers within the group are physically unable to ramp up output because of damage and disruptions caused by the war itself.
Compounding global supply concerns, Russian oil exports have faced their own setbacks. Ukrainian drone strikes recently forced a temporary shutdown of loadings at Russia’s Ust-Luga terminal on the Baltic Sea.
Media reports said operations resumed on Saturday after several days of interruption, but the episode highlighted how the broader geopolitical fallout — including the war in Ukraine — continues to ripple through energy markets.
For now, the combination of a closed Hormuz Strait, stalled diplomacy and fresh military saber-rattling from Washington has left oil traders on edge. Refiners are rerouting supply chains at considerable cost, consumers face the prospect of higher fuel prices at the pump, and governments from Asia to Europe are monitoring stockpiles amid fears of a protracted energy crunch.
Whether Trump’s Tuesday deadline forces a breakthrough — or triggers further escalation — could determine the next chapter in what has already become one of the most disruptive episodes for global oil markets in years.
WHAT YOU SHOULD KNOW
The sharp rise in oil prices to over $110–$112 per barrel is driven primarily by the ongoing closure of the Strait of Hormuz due to the U.S.-Israeli war with Iran.
This critical chokepoint, which handles about 20% of global seaborne oil trade, remains largely blocked, forcing refiners to scramble for scarce alternative supplies. Despite limited selective passages and a symbolic OPEC+ output hike, supply disruptions persist, compounded by stalled ceasefire talks and President Trump’s fresh ultimatum to Iran.
Geopolitical risk from the Hormuz blockade is the dominant force pushing oil markets higher, with potential for further volatility if the strait is not reopened soon.
