NEW YORK (Realist English). Oil prices rose to their highest levels in more than three years on Friday, as continued disruption in the Strait of Hormuz outweighed U.S. diplomatic efforts to ease tensions with Iran.
U.S. crude settled at $99.64 per barrel, up 5.46%, while Brent crude closed at $112.57, gaining 4.22%. Both benchmarks reached levels last seen in July 2022, when global markets were destabilized by Russia’s invasion of Ukraine.
The price surge comes despite U.S. President Donald Trump granting Iran a 10-day extension to reopen the Strait of Hormuz and pausing planned strikes on Iranian energy infrastructure until April 6. Trump said negotiations were “going very well,” though Iran has not publicly responded.
The Strait of Hormuz, a key transit route for global energy supplies, remains highly unstable. Attempts by vessels, including ships operated by China Ocean Shipping Company, to pass through the strait have been disrupted, according to ship-tracking data, underscoring ongoing risks to supply flows.
While some shipments have resumed, including limited tanker movements cited by Trump, analysts say these developments have not been sufficient to stabilize markets. Nearly 17.8 million barrels per day of oil and fuel flows have been disrupted, with cumulative losses estimated at around 500 million barrels, according to Rystad Energy.
“The oil market did not underreact to the disruption… it absorbed it,” said Paola Rodriguez-Masiu, chief oil analyst at Rystad Energy, warning that the system has shifted from a buffered state to a more fragile equilibrium after weeks of supply strain.
The current rally reflects tightening global supply conditions following sustained disruptions and declining inventories. Earlier resilience in the market was supported by surplus supply and strategic reserves, but those buffers are now diminishing.
Analytically, the disconnect between diplomatic messaging and market reaction highlights how physical supply risks — particularly in critical chokepoints — are dominating price formation.
The key uncertainty is whether partial reopening of the Strait of Hormuz can restore confidence, or whether continued instability will drive further price increases, with broader implications for inflation and global economic growth.