Brent crude jumped to $119.94 a barrel and WTI rose to $107.51 as the market kept pricing the same thing twice: barrels are still stuck in the Gulf, and no one has a near-term fix for it. The latest move followed a 6.1% surge in Brent the day before, with the June contract now in its ninth straight gain.
What changed is that the trade stopped looking like a one-day shock. Reuters reported that U.S. President Donald Trump spoke with oil companies about mitigating a possible months-long blockade of Iran’s ports, while efforts to end the U.S.-Israeli war against Iran remain deadlocked. That is the kind of language that shifts the market from interruption to duration.
Iran has largely blocked shipping through the Strait of Hormuz, a chokepoint for Middle East exports, and the U.S. has started blocking Iranian ships this month. The oil market is now being forced to price a supply problem that is both physical and political: less crude can get out, and the diplomatic channel to reopen it looks shut for now.
- Brent’s June contract expires Thursday; the more active July contract was at $111.38.
- OPEC+ is expected to agree on Sunday to a small quota increase of around 188,000 barrels a day, but that is small next to the disruption from Hormuz.
- The UAE’s exit from OPEC, effective May 1, may weaken the cartel over time, but Wood Mackenzie said Gulf producers will need months to get back to pre-war output.
That leaves refiners, shippers and governments dealing with a supply squeeze that has moved from hypothetical to operational. The next number to watch is Sunday’s OPEC+ decision — and whether the July Brent contract can stay above the June one as the front end rolls over.
