NEW YORK (Realist English). Oil market experts warn that the collapse of peace talks between the United States and Iran, combined with President Donald Trump’s announced naval blockade of the Strait of Hormuz, will drive up oil prices and worsen the global energy crisis.
Amrita Sen, founder and director of market intelligence at Energy Aspects, said that on Sunday, April 12, markets opened sharply higher.
“Until now, the US has allowed Iranian crude and product exports, and even eased sanctions so that more buyers could import these cargoes, because Washington has been so focused on keeping oil prices low. But if there is a genuine blockade, that would stop another 1.5–1.7 million barrels per day of oil exports — on top of the 10 million b/d already halted,” Sen explained.
Blockade as leverage
Trump’s announcement of a blockade of the Strait of Hormuz on April 12 appears to be an attempt to pressure the Iranian regime, which has maintained its ability to ship oil to key markets such as China even during the conflict.
Reopening the strait was a key sticking point in talks between the US and Iran aimed at turning the two‑week ceasefire (which began on April 8) into a more lasting peace. The talks ended without a deal on April 12. About one‑fifth of global oil and liquefied natural gas supplies pass through the Strait of Hormuz — one of the world’s most important energy chokepoints.
Escalation instead of peace
Analysts note that the US strategy of blockading the strait does not yet amount to a return to active combat, but it points to an escalation that will increase concerns about a worsening shortage of key petroleum products, such as jet fuel and diesel.
“Escalation tends to beget escalation,” said Kevin Book, head of research at ClearView Energy Partners. “Blocking Iranian tankers could raise prices and worsen shortages.” The plan also suggests that Trump is willing to risk a prolonged disruption to supplies despite soaring US gasoline and diesel prices.
“This shows that President Trump is willing to risk prolonged disruption going into the summer driving season in order to preserve the zero‑enrichment (of uranium in Iran) position,” noted Helima Croft, head of global commodity strategy at RBC Capital Markets.
Market expects a spike
On Friday, April 11, the oil market closed lower, with Brent posting its steepest weekly loss since August 2022 thanks to optimism that peace talks might lead to a deal. Brent futures fell nearly 1% to $95.20 a barrel, while WTI dropped 1.3% to $96.57 a barrel.
However, Jorge León, an analyst at Rystad Energy, said he expected prices to jump back above $110 a barrel when trading resumed on the evening of April 12. “What matters is that the chances of a durable ceasefire have plummeted,” he said.
Bob McNally, founder of Rapidan Energy Group and a former White House energy adviser, said the big question now is whether Iran and its allies will retaliate against critical energy infrastructure in the region.
The weekend of April 11–12 buried hopes for a diplomatic resolution to the Iranian conflict. Asian trading on April 13 opened with a massive rally in commodity markets. Brent crude futures jumped 8.36% to $103.16 a barrel, while US WTI soared 8.22% to $104.57 a barrel. Some exchange data showed WTI above $105 and Brent above $102, and by 9 a.m. Moscow time, Brent was up more than 8%. This is a reversal — exactly one week ago, on April 8, markets rejoiced when oil plunged below $95 after the ceasefire was announced. Now the fragile two‑week ceasefire is effectively hanging in the air.
The European gas market reacted even more violently to the escalation than the oil market. On the morning of April 13, the Dutch TTF (Title Transfer Facility) hub soared 18% to €51.30 per megawatt‑hour. This happened on the very first day of an extended trading session from 10 to 21 hours, which increased the market’s vulnerability to geopolitical shocks.
The main reason for the fear is the effective halt of LNG supplies through the Strait of Hormuz. At the end of February, Iran de facto blocked the passage of Qatari LNG tankers, and LNG shipments through the strait have not resumed for more than a month. Global market losses are estimated at about 20% of LNG supplies.
Analysts at ANZ Bank warn that the blockade not only restricts exports from the Persian Gulf but also exacerbates the overall supply deficit. OPEC+ plans to increase production by 206,000 barrels per day from May, but that is not enough to compensate for the volumes lost.
