West Texas Intermediate crude hit $104.23 per barrel on Monday morning. That’s an 8% jump from the day before. Brent crude rose to $101.82. Murban, the UAE benchmark, dipped 1.47% to $98.16. Natural gas gained 2.15% to reach $2.705. European gas futures spiked 18%.
The surge came after President Donald Trump announced on Sunday that the US Navy would blockade the Strait of Hormuz. He posted on Truth Social that the Navy would stop all ships trying to enter or leave the strait. US Central Command said the blockade would begin Monday at 10 a.m. Eastern Time and would only target vessels heading to or from Iranian ports. Ships going to non-Iranian destinations can still pass through.
Weekend peace talks in Islamabad had collapsed hours earlier. Vice President JD Vance led the US side. He said Iran refused to commit to giving up its nuclear weapons program. That ended the negotiations.
Strait of Hormuz crisis pushes oil prices higher
The strait has been in trouble since February 28. That’s when the US and Israel launched airstrikes on Iran. Iran hit back by attacking merchant ships, issuing passage warnings, and reportedly planting sea mines across the waterway.
Before the war, over 100 tankers moved through the strait every day. That carried about 25% of the world’s seaborne oil trade. Now fewer than 10 ships get through on most days. Iran has been letting some vessels pass for tolls as high as $2 million per ship. It has kept exporting its own crude throughout.
Saudi oil infrastructure took damage too. Strikes on energy facilities cut the kingdom’s production capacity by around 600,000 barrels per day. The East-West Pipeline, built to move oil overland to Red Sea ports and bypass the strait entirely, lost about 700,000 barrels per day after being hit. Aramco has since restored full pipeline capacity and restarted the Manifa oil field.
But reopening the strait won’t fix things overnight. Around 400 loaded tankers are stuck inside the Gulf waiting to leave. Only about 100 empty ones are lined up to go back in. Analysts say oil flows may not return to normal until July.
Gasoline, diesel and jet fuel costs hit multi-year highs
The US Energy Information Administration expects gasoline to peak near $4.30 per gallon this month. That’s up from $3.10 a gallon in 2025. The full-year average forecast is $3.70.
Diesel prices are climbing faster. April diesel is projected to top $5.80 per gallon. Low US inventories and tight global supply are behind the sharper rise. Diesel fuels freight trucks, cargo ships, and heavy equipment. When it gets expensive, shipping costs go up. That feeds into the price of groceries, building materials, and consumer goods.
Wholesale gas prices jumped 6% on Sunday night. Heating oil, which tracks closely with jet fuel, surged 10% early Monday. The International Air Transport Association reported that global jet fuel prices rose 7.1% last week to $209 per barrel. Airlines are expected to pass those costs to passengers through fuel surcharges.
The Gulf doesn’t ship raw crude alone. Huge volumes of refined diesel and jet fuel leave the region too. The EIA said losing access to those finished products has hurt diesel and jet fuel availability way more than gasoline.
South Korea scrambled early. The country is Asia’s top refined fuel exporter and its refineries run on Middle Eastern crude. Seoul locked in 110 million barrels from Kazakhstan, Oman, and Saudi Arabia just to cover April and May.
Crude oil is also the base ingredient for plastics, synthetic fabrics, fertilizers, medicines, asphalt, lubricants. At $100-plus a barrel, costs are climbing across the board for manufacturers who rely on any of these.
Oil market outlook after Hormuz blockade
WTI is up about 70% from this time last year. The first quarter of 2026 saw the biggest crude price increase on an inflation-adjusted basis since 1988, according to the EIA. Brent started January at $61 per barrel and hit $118 by end of March.
Elias Haddad at Brown Brothers Harriman called the blockade a negotiating move rather than a long-term strategy. JPMorgan Chase analysts pointed out that the last tanker to leave Hormuz before the closure on February 28 should reach its destination around April 20. After that, pre-war oil supplies in the global system will be fully used up.
Vance said on Sunday that the US left a proposal with Iran and is waiting for a response. Further talks have not been ruled out. The blockade’s duration remains unclear.
