Global oil prices have risen due to conflicting statements from the United States and Iran regarding negotiations to end hostilities. The ongoing conflict has led to the closure of the Strait of Hormuz, disruptions in crude oil production, and concerns about a global energy crisis.
As military clashes continue across multiple Middle Eastern countries, Brent crude (BZ=F) is approaching $106 per barrel, while US West Texas Intermediate crude (CL=F) is trading around $93. After the White House insisted that peace talks are still underway, US President Donald Trump warned Iran to take the negotiations seriously "before it is too late." Tehran has rejected the US proposal and put forward its own conditions for talks.
According to Iran's semi-official Fars News Agency, the Iranian parliament is drafting a bill that would impose security fees on vessels passing through the Strait of Hormuz. Citing an anonymous lawmaker, the agency reported that the bill is expected to be finalized next week.
The conflict has engulfed the energy-rich Middle East and is impacting the global economy, with Asia being particularly affected. As the global benchmark, Brent crude is on track for its largest monthly gain since 1990. The near-total closure of the Strait of Hormuz has resulted in the loss of millions of barrels of daily oil production capacity and significantly driven up prices for refined products ranging from diesel to jet fuel.
Rob Kapito, President of BlackRock, suggested that investors may be underestimating the risks posed by the Iran crisis. Speaking at an event in Melbourne on Thursday, Kapito stated that even if "the war ends tomorrow," oil prices could still surge to $150 per barrel, as it would take time for supply chains to return to full capacity.
Late Wednesday, President Trump reiterated that the US is engaged in talks with Iran. "They want to make a deal very badly, they're just afraid to say it," he said during a fundraising event in Washington. Separately, The Wall Street Journal reported that Trump recently told confidants he hopes to end the conflict within the coming weeks.
"The market has shown remarkable resilience over the past four weeks in the face of supply disruptions," said Paula Rodriguez-Masiu, lead oil analyst at energy consultancy Rystad Energy. "With much of the spare capacity trapped behind the Strait of Hormuz and inventories being drawn down, the energy market has shifted from having a buffer to being vulnerable."
While Trump has not disclosed specific plans, sources familiar with the matter revealed that the Pentagon has ordered the deployment of two Marine Expeditionary Units—totaling around 5,000 troops, along with aircraft and landing craft—to the region. On Tuesday, an insider also indicated that Trump plans to dispatch units from the Army's 82nd Airborne Division.
