Oil Prices Surge, Brent Tops $120/Bbl

Oil prices rose on Thursday, extending a recent surge that put Brent briefly above $120 a barrel fes signs of progress towards ending the U.S.-Iran conflict and reopening the Strait of Hormuz.

Brent oil futures rose 1.5% to $119.75 a/bbl by 20:35 ET (00:35 GMT). They had earlier risen as high as $120.34/bbl, their highest level since June 2022.

West Texas Intermediate crude futures rose 0.3% to $107.25/bbl.

Oil prices surged this week after reports showed U.S. President Donald Trump preparing for an extended naval blockade against Iran.

Concerns over such a scenario were exacerbated by reports that several top American oil executives met with Trump at the White House to discuss how to further limit the fallout from the conflict on American families.

An extended naval blockade is likely to see Iran keeping the Strait of Hormuz blocked in retaliation. A prolonged blockage in the shipping channel points to more global oil supply disruptions.

Ship traffic through Hormuz has slowed to a crawl since Iran blocked the passage in late-February, disrupting roughly 20% of the world’s oil supply.

But a report on Wednesday showed Trump seeking help from other countries to form a new international coalition to reopen the waterway.

Trump has repeatedly called for other nations to help in reopening Hormuz, although major U.S. allies have largely declined to help. He was seen railing against NATO members for not assisting the U.S. and Israel militarily during the conflict.

Talks between the U.S. and Iran largely fell through amid disagreements over Iran’s nuclear activities. While Trump did indefinitely extend a ceasefire with Iran, both sides have largely balked at any attempts at brokering talks.

Oil had briefly stalled after the United Arab Emirates said it will leave the Organization of Petroleum Exporting Countries this week. But the UAE is unlikely to increase production in the near-term due to disruptions caused by the Iran war.

Source: InvestingPro