Crude oil prices rose as U.S. President Donald Trump reaffirmed a Tuesday deadline for Iran to fully reopen the Strait of Hormuz, threatening to attack Iran's power plants and bridges if Tehran does not comply [1][2]. Trump warned that Iran would be 'taken out in one night' if the strait remained closed, and repeated his threats on Monday, signaling a greater willingness to follow through than in previous statements [1][2]. U.S. West Texas Intermediate crude futures for May increased by 0.93% to $113.46 per barrel, while Brent crude for June delivery rose 0.54% to $110.36 per barrel as of 8:45 p.m. ET [1].
The closure of the Strait of Hormuz, a vital waterway connecting the Persian Gulf and Gulf of Oman, has caused a supply shock, pushing up prices for crude oil, jet fuel, diesel, and gasoline since the conflict began on February 28 [1]. Shipping activity is slowly resuming, with 8 tankers transiting the strait on Monday, compared to fewer than 2 per day in March, though this remains well below the pre-war average of 20 million barrels of crude oil and products per day in 2025 [1].
Negotiations between the U.S. and Iran are ongoing, with reports that the two sides, along with regional mediators, are discussing a framework for a potential 45-day ceasefire that could lead to a permanent end to the war [1][2]. Iran has rejected the U.S. ceasefire proposal and presented its own 10-point plan, which includes a permanent end to hostilities, a protocol for safe passage through the Strait of Hormuz, lifting of sanctions, and reconstruction [1]. Trump acknowledged Iran's proposal as a 'significant step' but stated it was 'not good enough' [1][2].
Market reactions have been mixed. While oil prices edged higher on the threat of escalation, the S&P 500 rose for a fourth consecutive session as investors weighed the possibility of de-escalation and ongoing negotiations [2]. According to Brain Jacobsen, chief economic strategist at Annex Wealth Management, Trump is applying additional pressure as the deadline approaches to push negotiations forward [1].
There is some discrepancy regarding the extent of the strait's closure. While official reports and market sentiment suggest a significant disruption, Citrini Research claims that vessels are still moving through the strait, based on observations from an analyst stationed on Oman's Musandam Peninsula [2].
CONCLUSION
Oil prices have climbed amid heightened geopolitical tensions as President Trump maintains a firm deadline for Iran to reopen the Strait of Hormuz, with threats of military action if demands are not met. Negotiations continue, but the market remains on edge, balancing the risk of escalation with cautious optimism for a potential ceasefire. Shipping activity is slowly resuming, but remains well below normal levels, and uncertainty persists regarding the true extent of the disruption.