Brent Blows Past $107 As Hormuz Stays Shut

Oil Prices Surge as Deal Hopes Fade

Brent crude futures jumped 3.3% to $107.65 a barrel on Tuesday, while WTI climbed 3.5% to $101.51, as prospects for a US-Iran agreement dimmed and the Strait of Hormuz remained effectively closed to normal tanker traffic.

President Trump rejected Tehran's latest counteroffer, and dismissed the ceasefire as being on "massive life support" after throwing out Iran's latest peace proposal. Iran had called for the US to end its naval blockade and ease sanctions while seeking to retain some authority over traffic through the key shipping route.

The conflict has caused the restriction of nearly all traffic through the Strait of Hormuz, leading to what the International Energy Agency has characterised as the "largest supply disruption in the history of the global oil market." Roughly one-fifth of the world's oil passes through Hormuz, and further limits would squeeze already constrained supply, driving prices higher.

Aramco CEO Warns of Multi-Year Disruption

The oil market will not normalize until 2027 if the disruption in the Strait of Hormuz persists past the middle of June, Saudi Aramco CEO Amin Nasser said. Speaking on the company's first-quarter earnings call, Nasser told analysts: "The longer the supply disruptions continue, even for another few more weeks, it is going to take a much longer time for the oil market to rebalance and stabilize."

The oil market is losing 100 million barrels of supply every week Hormuz remains closed, with total net losses so far reaching 880 million barrels. Only two to five vessels are now crossing the strait daily, compared to around 70 before the war. Oil inventories are rapidly drawing down, particularly for gasoline and jet fuel, and Nasser warned this "may reach critically low levels ahead of the summer driving and travel season."

On the military front, retired Admiral James Stavridis has floated the possibility that the US may need to reopen the strait by force if diplomacy continues to fail. Reports have suggested President Trump is weighing a potential return to military operations, alongside renewed discussions about escorting commercial vessels through Hormuz.

Goldman Sachs has warned that Brent could average above $100 for the rest of 2026 if the Strait of Hormuz stays largely closed for another month, even if a ceasefire holds. If the severely limited traffic continues beyond that, Brent could average $120 per barrel in the third quarter and $115 in the final quarter of the year, according to the bank.

Sources:
CNBC: Saudi Aramco CEO says oil market won't normalize until 2027 if Hormuz disruption persists
OilPrice.com: Goldman warns Brent could average above $100 in 2026 if Hormuz stays closed
IEA: Oil Market Report, April 2026