Summary

Global oil prices surged to their highest levels since the US-Iran conflict began, with Brent crude topping $118 per barrel on Wednesday as diplomatic efforts to end the war stalled and the Strait of Hormuz remained largely closed to commercial shipping. Brent crude jumped more than 6% on Wednesday to close at $118.03 a barrel after US President Donald Trump said he would maintain the naval blockade against Iran until Tehran agreed to a nuclear deal. West Texas Intermediate (WTI) futures advanced nearly 7% to settle at $106.88 a barrel. The latest surge followed a string of gains over the preceding sessions. Brent stood at $111.49 per barrel as of early Tuesday, up 13% from the previous Tuesday, the last time the benchmark settled below $100. The contract has now risen for seven consecutive trading days. Iran offered to end its chokehold on the Strait of Hormuz without addressing its nuclear programme, with the proposal passed to Washington through Pakistani intermediaries. Trump rejected the terms, insisting any peace agreement must include a complete end to Iran’s nuclear enrichment programme. “They are choking like a stuffed pig, and it is going to be worse for them. They can’t have a nuclear weapon,” Trump told Axios on Wednesday. The conflict has paralysed one of the world’s most critical energy arteries. The Strait of Hormuz, through which roughly 20% of global seaborne oil trade and 20% of the world’s liquefied natural gas (LNG) typically transit, has been largely blocked since February 28, 2026, when the United States and Israel launched an air war against Iran. Prior to the conflict, between 125 and 140 vessels transited the strait daily. Rystad Energy analyst Jorge Leon said oil above $110 reflected a market rapidly repricing geopolitical risk. “With peace talks stalled and no clear path to reopening the Strait of Hormuz, traders are factoring in a prolonged disruption to a critical artery of global supply,” he said. “Even in a best-case scenario, any US-Iran agreement is likely to be narrow and partial, leaving the Strait issue unresolved, which means the upside risks to prices remain.” PVM analyst Tamas Varga warned that the loss of approximately 10 million barrels per day of crude and petroleum products through the strait will continue to exceed falling consumption as inflationary pressures and demand destruction build, pointing to an increasingly tight oil market balance. Analysts noted that the biggest near-term driver for oil prices remains the timing of any resumption in oil flows through the Strait of Hormuz.