Oil Jumps on US Hormuz Blockade

WTI crude futures climbed as much as 9.3% to above $105 per barrel on Monday, recouping losses from last week after President Donald Trump announced a US blockade of the Strait of Hormuz, following the collapse of weekend negotiations with Iran. The restrictions will apply only to vessels entering or leaving Iranian ports starting at 10 a.m. Eastern Time. Talks held in Pakistan failed to produce an agreement, with the US accusing Tehran of refusing to curb its nuclear ambitions, while Iran reportedly sought control of the strait, war reparations, a broader regional ceasefire (including Lebanon), and access to frozen overseas assets. The key shipping route has effectively remained closed since the conflict began, driving sharp gains in oil and gas prices and raising concerns about inflationary pressures and weaker global growth. Meanwhile, Saudi Arabia said it has restored full pumping capacity through its East-West pipeline to the Red Sea, along with output from the Manifa field.

Oil prices fell 2.35% on Friday, with WTI crude trading around $95.5 per barrel as markets focused on shifting geopolitical developments and ongoing negotiations in the Middle East. The move came amid continued uncertainty around US–Iran talks, with traders weighing the potential for de-escalation against lingering risks to regional stability. Concerns over possible disruptions to shipping flows through the Strait of Hormuz continued to support a geopolitical risk premium in oil markets, even as immediate supply disruption fears remained contained. Despite the daily decline, crude oil remains up 10.28% over the period, reflecting sustained sensitivity to geopolitical headlines and supply-side risk conditions.

Oil prices swung between gains and losses on Friday, with WTI crude futures trading near $98 per barrel, though the benchmark remained on track for its largest weekly decline in 9 months. The moves come amid cautious optimism that the war in the Middle East could be nearing an end. US and Iranian delegations are set to meet in Pakistan on Saturday, while Israel has agreed to hold talks with Lebanon’s government, raising hopes for de-escalation. US President Trump said he was “optimistic” about a potential deal, even as he warned Tehran over proposed transit fees in the Strait of Hormuz. Despite this, the Strait of Hormuz remains largely closed, with reports indicating that Iran is considering charging ships for passage. Adding to supply concerns, Saudi Arabia said attacks on its oil facilities have reduced production capacity by around 600,000 barrels per day and cut throughput on the East-West Pipeline by approximately 700,000 bpd. On the week, the US oil benchmark is down about 12%.