Oil prices surge as Hormuz Strait blockade rattles markets

Oil prices continued to rise today, with Brent reaching its highest level since 2022, when the war in Ukraine began. The supply disruption caused by the conflict in the Middle East remains in focus. At around 19:15 CEST, the price of North Sea crude Brent was up 7,6 percent at 119,69 USD per barrel. US light crude WTI was also up 7,6 percent, trading at 107,52 USD per barrel, AFP reported.

White House officials told Reuters and AFP today that US President Donald Trump had spoken with representatives of US oil companies about how to mitigate the effects of a potential US naval blockade of Iran lasting several months. Participants discussed steps Trump has taken to calm international oil markets and measures they could take to maintain the blockade for several months if necessary while minimizing its impact on US consumers.

In response to US-Israeli strikes that began on 28 February, Iran has effectively blocked the Strait of Hormuz, through which around a fifth of the world's oil supplies normally pass. The United States, in turn, has launched a naval blockade of Iranian ports aimed at curbing the Iranian regime's revenue from oil sales. The Wall Street Journal wrote overnight, citing its sources, that US President Donald Trump intends to continue the blockade.

"The blockade of the (Hormuz) Strait is behind the current rise in oil prices. If Trump is prepared to extend the blockade, supply disruptions will worsen further and continue to push oil prices higher," said analyst Yang An of China's Haitong Futures, according to Reuters.

In March, the price of Brent crude climbed to nearly 120 dollars per barrel.

Investors are also assessing the potential impact of the United Arab Emirates' surprise decision to leave the Organization of the Petroleum Exporting Countries (OPEC) and the wider group of producers, OPEC+. Analysts expect the move to lead to increased oil supplies to the market in the medium term. First, however, the conflict in the Middle East must be resolved and shipping through the Strait of Hormuz resumed, they say.

Oil prices in dollars per barrel (about 159 liters)