Oil prices surged above $100 a barrel on Monday after the U.S. announced a naval blockade on Iran’s Strait of Hormuz.
Brent crude futures, the international benchmark, leaped $6.96, or 7.3 percent, to $102.16 a barrel by 04:30 GMT. U.S. West Texas Intermediate crude rose even more sharply, gaining $8.12, or 8.4 percent, to $104.69.
The dramatic rebound erased the modest declines seen Friday and wiped out the temporary calm that had settled during a fragile two-week ceasefire.
The trigger was blunt and unmistakable. After marathon negotiations collapsed without a deal to end the six-week-old conflict, President Donald Trump declared on Sunday that the U.S. Navy would begin blocking all maritime traffic to and from Iranian ports.
The move, he said, would choke off up to two million barrels per day of Iranian-linked oil flows — a volume large enough to reshape global supply balances in the weeks ahead.
“The market is now largely back to conditions before the ceasefire, except now the U.S. will block the remaining up to 2 million barrels per day Iranian-linked flows through the Strait of Hormuz as well,” said Saul Kavonic, head of energy research at MST Marquee in Sydney.
U.S. Central Command confirmed the timetable: enforcement would begin at 10 a.m. Eastern Time (1400 GMT) on Monday. The blockade, the statement said, would be applied “impartially against vessels of all nations entering or departing Iranian ports and coastal areas,” including every Iranian facility on the Arabian Gulf and the Gulf of Oman.
However, Washington insisted it would continue to guarantee freedom of navigation for ships heading to or from non-Iranian ports — a delicate distinction aimed at avoiding an immediate broader confrontation with Gulf shipping lanes.
The rhetoric from Tehran was equally uncompromising. Iran’s Revolutionary Guards warned Sunday that any military vessels approaching the strait would be regarded as a violation of the ceasefire and “dealt with harshly and decisively.”
Yet even as the deadline loomed, shipping data told a story of nervous pragmatism. Three fully laden supertankers slipped through the Strait of Hormuz on Saturday — the first vessels to exit the Gulf since last week’s ceasefire was announced.
By Sunday, however, tanker tracking services from LSEG showed a growing number of oil carriers altering course or holding position, clearly steering clear of the waterway ahead of the U.S. deadline.
IG market analyst Tony Sycamore said the blockade’s immediate effect would be to “effectively choke off the flow of Iranian oil,” forcing Tehran’s remaining customers and allies to exert pressure on Washington to reopen the route.
The price spike also carried unmistakable political undertones. In a rare public acknowledgment of domestic consequences, President Trump noted that elevated oil and gasoline prices could persist through November’s midterm elections — a direct reference to the political risks stemming from his administration’s decision to strike Iran six weeks ago.
Priyanka Sachdeva, senior market analyst at Phillip Nova, described the market reaction as measured rather than panicked. “The mere threat of enforcement alone has been sufficient to re-price risk,” she said. “The return to triple-digit pricing, or the jump in a geopolitical risk premium that briefly faded during earlier ceasefire headlines, looks justified.”
Adding to the supply-side picture, Saudi Arabia announced Sunday that it had restored full pumping capacity through its East-West pipeline to roughly seven million barrels per day.
The kingdom’s swift recovery followed an internal assessment of damage sustained by its energy infrastructure during the recent fighting—a quiet signal that Riyadh, the world’s largest oil exporter, stands ready to help stabilize global markets even as tensions in the Gulf escalate.
For now, traders are left watching two clocks: the one ticking toward the U.S. Navy’s enforcement at 14:00 GMT, and the longer one measuring how long Iran’s economy — and the global economy — can withstand the sudden tightening of the world’s most critical energy artery.
WHAT YOU SHOULD KNOW
Oil prices have surged sharply above $100 per barrel as the U.S. Navy prepares to enforce a naval blockade on Iran’s ports via the Strait of Hormuz starting today.
This move will effectively choke off up to 2 million barrels per day of Iranian oil exports, reintroducing a major geopolitical risk premium into the market after the collapse of ceasefire talks and pushing energy costs higher—potentially through the U.S. midterm elections.
