West Texas Intermediate (WTI) futures on NYMEX reached a fresh over seven-week high at around $107.35 before flattening to near $104.85 during the European trading session on Thursday, maintaining a bullish near-term bias as prices held well above the 20-day Exponential Moving Average at roughly $94.60 [1]. Meanwhile, Brent crude, the international benchmark, rose to more than $126 a barrel overnight—the highest since 2022—before retreating to just over $116 a barrel as of 5:45 a.m. ET [2]. U.S. gas prices also surged to an average of $4.30 a gallon, the highest level in nearly four years [2].
The price spike follows U.S. President Donald Trump's warning of a prolonged blockade on Iranian sea ports after rejecting Iran’s proposal to reopen the Strait of Hormuz, a vital passage for nearly 20% of global energy supply [1][2]. Trump stated that the naval blockade would continue until Washington secures a deal with Tehran addressing Iran’s nuclear program [1][2]. In response, Iran warned of 'unprecedented military action' and declared the U.S. blockade 'doomed to fail' [1][2]. Traffic in the Strait of Hormuz has been at an effective standstill since Iran attacked shipping after the U.S. and Israel launched a joint assault in late February, causing significant disruption to the global economy [2].
The ongoing closure of the Strait has triggered an energy supply crisis, undermining currencies of oil-importing economies and sending energy prices soaring [1][2]. The International Energy Agency's head, Fatih Birol, described the situation as a 'major economic and energy challenge' at a conference in Paris [2]. Despite the ceasefire, the prospect of prolonged disruption continues to rattle markets [2].
On the policy front, the Federal Reserve announced it would hold interest rates at current levels, with Chair Jerome Powell noting increased risks to both inflation and the economy, which has raised concerns over oil demand outlook [1]. In the U.S., President Trump and top administration officials met with energy industry executives to discuss the blockade and possible next steps, including maintaining the blockade for months if needed [2]. U.S. Central Command has prepared plans for potential 'short and powerful' military strikes to force Iran back to negotiations, and options for adjusting the U.S. military presence in the strait were discussed [2].
Technical analysis indicates that WTI remains in a stretched phase, with the Relative Strength Index around 64 suggesting buyers retain control and the potential for further upside towards the multi-year high of $113.28 posted on March 9 [1].
CONCLUSION
The U.S.-Iran standoff over the Strait of Hormuz has driven oil and gas prices to multi-year highs, with both WTI and Brent crude experiencing significant volatility. Market sentiment remains negative due to ongoing supply disruptions and the threat of military escalation, while policymakers and industry leaders prepare for prolonged uncertainty. The situation continues to pose a major challenge to the global economy and energy markets.