Oil Prices Rise as Strait of Hormuz Remains Closed During U.S.-Iran War

TLDR

• Brent crude rose 1.7% to $106.88/barrel; WTI gained 1.4% to $97.21/barrel on Friday
• Both benchmarks on track for their biggest weekly gain since early March
• The Strait of Hormuz remains near-closed, cutting off roughly one-fifth of global oil supply
• Trump said he was in no rush to reach a permanent deal with Iran, deepening uncertainty
• Goldman Sachs estimates Persian Gulf output is down ~14.5 million barrels/day, over 50% in April

Oil prices climbed sharply on Friday after President Donald Trump said he was in no rush to end the ongoing U.S.-Iran conflict, adding fresh uncertainty to already strained energy markets.

Brent crude futures rose 1.7% to $106.88 a barrel. U.S. West Texas Intermediate added 1.4% to reach $97.21 a barrel. Both benchmarks are on pace for their largest weekly gain since early March.

The moves come as the Strait of Hormuz — a narrow waterway off Iran’s southern coast — remains nearly shut to tanker traffic. Around one-fifth of global oil flows through that corridor.

The strait has been effectively closed for weeks. Major Gulf producers including Saudi Arabia and Qatar have been exploring alternative shipping routes, but none have fully replaced it.

Iran seized ships attempting to cross the strait this week. U.S. forces also boarded a supertanker carrying Iranian oil in the Indian Ocean as the Navy stepped up its blockade of Iranian ports.

On Thursday, Trump posted on Truth Social that he had ordered the U.S. Navy to “shoot and kill” any Iranian vessels caught laying mines in the strait. Iran, meanwhile, released video of its commandos storming a ship and touted its fast-boat attack capabilities.

Peace Talks at a Standstill

Efforts to revive negotiations remain deadlocked. Two U.S. officials familiar with the matter told Bloomberg that Trump’s social media posts and the ongoing naval blockade have complicated talks being mediated by countries including Pakistan.

Trump told reporters Thursday that he didn’t want to rush into a permanent deal, saying the U.S. had crippled Iran’s military and that the country was in disarray.

A ceasefire between the U.S. and Iran was extended indefinitely earlier in the week, but oil markets found little comfort in that. The Lebanon-Israel ceasefire was also extended by three weeks following talks in Washington.

A U.S.-sanctioned supertanker carrying Iranian oil was spotted apparently attempting to cross the Strait of Hormuz on Friday, with overall tanker traffic through the waterway at a virtual standstill.

Goldman Sees Months of Supply Disruption

Goldman Sachs analysts, including Daan Struyven, said in an April 23 note that Persian Gulf crude production could take “a few months” to mostly recover — and that’s assuming a full reopening of Hormuz and no renewed strikes.

The bank estimates that Gulf output has been cut by roughly 14.5 million barrels per day, accounting for more than 50% of April’s supply from the region.

Brent was on track for a weekly gain of roughly 17% as of Friday morning.

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