On April 30, international oil prices experienced extreme volatility. Driven by renewed military tensions between the U.S. and Iran and expectations of a prolonged closure of the Strait of Hormuz, the global crude benchmark, Brent crude futures for June delivery on the Intercontinental Exchange, surged by up to 7%, surpassing $126 per barrel to reach its highest level since June 2022. Meanwhile, West Texas Intermediate crude futures for June delivery on the New York Mercantile Exchange rose by more than 3% during the session.
Within just a few hours, these gains were completely erased as oil prices reversed sharply. At the time of writing, Brent and WTI crude futures were trading at $114.05 per barrel and $104.57 per barrel, down 3.37% and 2.16% for the day, respectively.
Regarding market developments, hopes for a resolution to the U.S.-Iran stalemate have diminished further. According to reports, U.S. media cited sources stating that President Trump would be briefed on new military options against Iran by the U.S. Central Command on the 30th. This indicates that Trump is considering relaunching large-scale military operations against Iran, "either to break the negotiation deadlock or to deliver a decisive blow before ending the war." The report also mentioned another proposed plan focusing on securing parts of the Strait of Hormuz to restore commercial traffic, which could involve deploying ground forces.
Additionally, President Trump recently met with executives from major oil and gas companies at the White House to discuss the impact of the Iran conflict on the energy sector and the possibility of a prolonged blockade against Iran. An unnamed White House official stated that the meeting addressed domestic U.S. oil and gas production, crude futures, natural gas transportation, and potential measures to extend the current blockade against Iran for several months while minimizing the impact on American consumers.
Iran's stance remains firm. An advisor to Iran's Supreme Leader posted on social media on the 30th, stating that Iran controls the lifeline of global oil and gas transportation and is not afraid of a maritime blockade. "A maritime blockade will not send Iran back to the Stone Age, but it will certainly plunge the hegemonic regime into an ice age," the message said.
Earlier this week, Trump claimed that Iran would exhaust all its oil storage capacity within three days due to the U.S. blockade, leading to explosions in its oil infrastructure from internal pressure. Iran's Parliament Speaker mocked the statement, saying, "This is the kind of bad advice the U.S. government gets from people like [U.S. Treasury Secretary], who advocate blockade theories and have pushed oil prices above $120. Next stop: $140. The problem is not the theory itself, but the mindset behind it."
Over the past two months, fundamental disagreements between the U.S. and Iran on nuclear issues and Strait of Hormuz access have proven difficult to resolve in the short term. However, the longer shipping remains restricted in the strait, the longer energy prices will stay elevated, and the greater the cost to the global economy.
On April 28, a spokesperson for the U.N. Secretary-General cited data indicating that ship traffic related to the Strait of Hormuz had declined by 95.3% since February 28. The latest figures from the U.N. Conference on Trade and Development's online tracking dashboard also show that global staple food prices have increased by 6%, while crude oil prices in European markets have risen by 53%.
Comments