Brent oil futures have surged above $112 per barrel following the continued closure of the Strait of Hormuz, according to Rabobank's Senior Macro Strategist Bas van Geffen [1]. The rally in futures was triggered after US President Trump rejected Iran’s proposal to reopen the strategic waterway, with Iran expected to submit a revised proposal in the coming days [1]. Negotiations between the US and Iran remain deadlocked, and the likelihood of a swift military resolution to the standoff has diminished, leaving ships stranded in the Persian Gulf [1].
Rabobank notes that futures prices are now converging toward physical prices, reflecting the ongoing supply risks posed by the closure [1]. Despite the price surge, Rabobank's energy strategists emphasize that the near-term supply-demand balance remains unchanged until the Iran war concludes and the Strait of Hormuz is reopened [1]. This situation also limits the potential for the UAE to increase oil output in the immediate future [1].
The persistent closure of the Strait of Hormuz, a critical chokepoint for global oil shipments, continues to drive market uncertainty and elevate prices, with no clear resolution in sight [1].
CONCLUSION
The ongoing closure of the Strait of Hormuz has pushed Brent futures above $112, reflecting heightened supply risks and market uncertainty. However, Rabobank analysts caution that near-term supply-demand fundamentals remain unchanged until the conflict ends and the strait reopens, limiting the potential for increased output from regional producers.