During Asian and European trading hours on Monday, April 20, international oil prices experienced significant volatility—opening sharply higher, extending gains, and then steadily retreating. Brent crude oil surged by as much as 6.5% during the session before paring gains to 4.85%, trading around $94.74 per barrel.
A dramatic reversal in control over the Strait of Hormuz over the weekend served as the key catalyst behind the surge in global oil prices.
On April 17, Iranian Foreign Minister Araghchi announced that, in line with the ceasefire agreement, the Strait of Hormuz would be opened to all commercial vessels following designated routes. Following the announcement, Brent crude prices briefly fell below $90 per barrel.
However, U.S. President Trump promptly stated that the maritime blockade targeting Iran would continue. Less than 24 hours later, on April 18, Iran's armed forces, Supreme National Security Council, and Islamic Revolutionary Guard Corps Navy issued statements announcing the restoration of full control over the Strait of Hormuz, citing U.S. violations of the ceasefire agreement. A blockade was imposed starting that evening and would remain in effect until further notice.
The blockade was accompanied by strict enforcement measures: The Iranian Revolutionary Guard Navy designated the "Larak Corridor" as the sole permitted shipping route, prohibiting any unauthorized vessels from passing. All ships in the Persian Gulf and Gulf of Oman were ordered to remain at their berths, with any movement toward the strait considered as "cooperating with the enemy." Non-compliant vessels would be treated as targets.
On April 18, a commercial vessel operated by French shipping group CMA CGM encountered "warning shots" in the strait, further underscoring navigational safety risks.
Shipping data indicated that the number of vessels passing through the strait has remained low recently. Only 19 vessels transited on Saturday, far below the historical average of 138 vessels per day. Approximately one-fifth of the world’s oil and natural gas transportation routes face disruption risks, directly fueling the sharp rise in international oil prices.
U.S.-Iran Negotiations Intensify as Ceasefire Deadline Nears
Preparations for the second round of U.S.-Iran negotiations have been marked by conflicting signals, amplifying market concerns over escalating geopolitical tensions.
According to a White House statement on April 19, U.S. Vice President Vance will lead a delegation to Islamabad, Pakistan, for the new round of talks. President Trump confirmed via social media that the U.S. delegation would arrive on the evening of April 20.
As the host country, Pakistan’s Interior Minister Mohsin Naqvi visited the U.S. Embassy in Pakistan on April 20 to discuss details and security arrangements for the talks. The meeting venue in Islamabad has already been prepared.
In contrast, Iran sent opposing signals: late on April 19, Iran explicitly stated that it was prepared for renewed hostilities and would not participate in the second round of negotiations.
Foreign Minister Araghchi accused the U.S. of repeatedly undermining trust, violating the ceasefire agreement, and threatening Iranian ports and vessels. He described U.S. demands as "excessive" and "unrealistic," reflecting a lack of diplomatic sincerity.
Notably, the current two-week ceasefire agreement between the U.S. and Iran is set to expire on April 22. The first round of talks held earlier this month in Islamabad ended without results. If no extension is agreed upon, geopolitical conflict is likely to escalate further, directly impacting oil supply expectations. Markets should closely monitor this critical timeframe, as oil price volatility may continue to intensify in the near term.
Nuclear Dispute Shows Signs of Thaw, but Core Differences Remain
Amid the tense negotiation atmosphere, progress on the nuclear issue has emerged as a key factor in easing market panic.
Three U.S. and regional diplomatic sources revealed that Iran has agreed to transfer all of its enriched uranium stockpiles. Potential recipients include Russia, which has expressed willingness to accept the material, the International Atomic Energy Agency, or the United States.
This development is the primary reason behind Trump’s earlier optimistic remarks. The U.S. had proposed unfreezing $20 billion of Iranian funds in exchange for the enriched uranium inventory and requested participation in locating the stockpiles. However, Iran has so far only agreed to allow IAEA personnel to participate and has not accepted direct U.S. involvement.
Fundamental differences on the nuclear issue remain: The U.S. demands that Iran indefinitely suspend its nuclear program and halt uranium enrichment for 20 years, while Iran is only willing to accept a five-year suspension.
An Iranian deputy foreign minister explicitly stated that Iran "will never transfer enriched uranium to the United States." Current discussions favor a compromise where some highly enriched uranium would be shipped to a third country rather than the U.S.
Additionally, Iranian President Pezeshkian emphasized that Iran’s nuclear rights are legitimate and that U.S. attempts to剥夺 these rights through bullying are unfounded. Iran is fully committed to defending its legitimate rights while seeking "a dignified end to the war."
The partial thaw in nuclear negotiations leaves room for a diplomatic resolution, but bridging core disagreements remains a significant challenge.
Divisions Within Iran’s Leadership Shape Policy Direction
Differing stances among Iran’s president, foreign minister, and the Islamic Revolutionary Guard Corps reflect internal power dynamics that influence the U.S.-Iran standoff.
President Pezeshkian maintains a defensive posture, emphasizing the need to uphold Iran’s position and remain vigilant against "hostile forces," while actively pursuing diplomatic channels to end the war "with dignity." He has shown some flexibility on the nuclear issue.
Foreign Minister Araghchi focuses on diplomatic efforts, coordinating with countries like Pakistan to advance negotiations while strongly criticizing U.S. insincerity. He serves as the primary voice for Iran’s diplomatic stance.
The Islamic Revolutionary Guard Corps has taken a hardline主导 role. Its April 18 announcement of the strait blockade directly reversed the foreign minister’s earlier opening declaration, highlighting its substantial influence over national security and foreign policy decisions.
The Revolutionary Guard not only controls strait access by delineating the "Larak Corridor" and enforcing strict measures but also engages in direct military standoffs with U.S. forces. Recently, U.S. forces fired warning shots at an Iranian commercial vessel in an attempt to force it to turn back. The situation de-escalated after Revolutionary Guard naval forces intervened, underscoring the Guard’s firm stance in protecting Iran’s maritime interests.
Analysts note that Iran’s civilian government holds relatively weak authority, making the Revolutionary Guard’s position a critical variable in determining the situation’s trajectory.
Cross-Market Dynamics: Equities Defy Geopolitical Tensions
Despite fading hopes for a U.S.-Iran de-escalation and sharp oil market fluctuations, major Asian stock markets opened higher on Monday, reflecting clear cross-market capital reallocation trends. Japan’s Nikkei 225 index rose over 1% in early trading, South Korea’s KOSPI gained about 1.3%, Hong Kong’s Hang Seng Index advanced around 0.7%, and the Shanghai Composite Index climbed more than 0.7%.
This trend indicates differentiated capital allocation across risk assets: On one hand, progress on the nuclear issue has eased fears of all-out war. On the other hand, some investors believe current oil prices already reflect geopolitical risks, leading them to shift toward equities with attractive valuations.
However, caution is warranted: Should subsequent talks fail or strait封锁 intensify, sharp oil market swings could trigger correlated movements in equity markets. Investors should monitor cross-market risk transmission and adjust trading strategies accordingly.
U.S.-Iran Conflict Outlook: Short-Term War Avoidance Likely, Long-Term Risks Persist
Considering all factors, the probability of a full-scale U.S.-Iran war in the near term has decreased, but the prolonged and uncertain nature of geopolitical tensions will continue to support elevated oil prices.
Positive developments include the nuclear thaw, Iran’s agreement to transfer enriched uranium, and ongoing preparations for talks—all indicating that diplomatic resolution remains the preferred path. The Trump administration, facing domestic pressure from soaring oil prices and unpopular war sentiment, also has incentives to seek an exit strategy, possibly exaggerating negotiation progress to calm markets and curb oil prices.
However, risks remain significant: The Strait of Hormuz blockade persists, and U.S. forces plan to board and seize Iranian-related tankers, maintaining the potential for military clashes. The approaching ceasefire expiration and risk of failed talks have not dissipated. The Revolutionary Guard’s hardline stance, complex internal power dynamics, and fundamental disagreements over nuclear rights and blockade lifting are unlikely to be resolved quickly.
In the coming period, the U.S. and Iran are expected to maintain a state of "negotiations alongside confrontation." Geopolitical risk will remain a key driver supporting oil prices, with Brent crude likely to stay volatile above $90 per barrel in the short term.
From a technical perspective, as mentioned in earlier analysis, key support levels where bullish momentum is concentrated remain intact. Last Friday’s rapid decline in oil prices presented an attractive entry opportunity.
As of 16:07 Beijing time, the Brent crude June contract was trading at $95.86 per ounce.
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