Full Breakdown
Oil Prices Surge as US-Iran Talks Stall and the Strait of Hormuz Remains Blocked
4/28/2026, 11:41:10 AM
Market Spike Amid Diplomatic Deadlock
On Monday Asian trading saw Brent crude rise 2-3 % to $107-$111 per barrel and U.S. West Texas Intermediate (WTI) climb 2 % to $96-$98. Reuters recorded Brent at $108.23, Al Jazeera at $111.49, and Business Times at $109.64. The rally marked the sixth-seventh consecutive session of gains, the longest streak since early 2025.
Background: War, Ceasefire, and Hormuz Closure
The conflict began on 28 Feb after U.S. and Israeli airstrikes on Iran. A two-week ceasefire was later extended without a set deadline, but Iran closed the Strait of Hormuz and the United States imposed a naval blockade of Iranian ports. Ship-tracking data show only eight vessels crossed on Sunday, down from the pre-war average of 129-140 daily (UNCTAD, Reuters).
Data & Statistics
- Price levels: Brent $107.70 (BBC), $108.23 (Reuters), $111.49 (Al Jazeera); WTI $96.40-$98.00.
- Transit: 7-8 ships in the last 24 h (Reuters), 19 on the previous day (Al Jazeera).
- Supply impact: The strait carries roughly 20 % of global oil and LNG; analysts estimate a daily shortfall of 10-13 million barrels (Varga). Goldman Sachs estimates a 14.5 million-bpd cut in Persian Gulf output.
- Consumer prices: U.S. gasoline averaged $4.11 /gal in late March, rising to $4.00-$4.11 in early April; California approached $6 /gal.
Why It Matters
Tight global supplies are feeding inflation expectations, prompting central banks—especially the ECB—to weigh rate hikes. SEB’s Bjarne Schieldrop warns “alarm bells” will ring if the strait stays closed into May, while JPMorgan notes that inventories could hit “operational minimums” by late May, risking exponential price spikes.
Official Statements & Responses
President Donald Trump cancelled the planned envoy trip of Steve Witkoff and Jared Kushner, posting on Truth Social that Tehran suffers “infighting and confusion” and that the U.S. “has all the cards; they have none.” Iranian Foreign Minister Abbas Araghchi said bilateral talks with Oman continue and emphasized “ways to ensure safe transit that is to benefit of all dear neighbors and the world.” White House press secretary Karoline Leavitt had earlier announced the envoy travel before the cancellation. U.S. Central Command reported turning around 38 ships under the blockade.
Criticism & Opposition
Analysts such as Priyanka Sachdeva (Phillip Nova) describe the stalled talks as “superficial” and warn that continued vessel curtailment keeps oil risk premiums elevated. SEB’s Schieldrop cautions that a prolonged Hormuz closure could trigger a “real crisis” forcing global oil consumption down to near-availability levels.
On-the-Ground Reports
Six Iranian tankers were forced to reverse course by the U.S. blockade (Reuters). An LNG tanker operated by Abu Dhabi National Oil Co successfully transited the strait, highlighting uneven impacts on different fuel types (Business Times).
Conflicting Reports & Gaps
Brent price figures vary from $107.70 (BBC) to $111.49 (Al Jazeera), reflecting rapid market swings. Transit counts differ—7-8 ships (Reuters) versus 19 (Al Jazeera)—due to differing reporting windows. No official U.S. comment on Iran’s proposal to reopen the strait has been recorded, leaving diplomatic intent unclear.
Verbatim Quotes
- “’ Nobody knows who is in charge, including them.” — Donald Trump, President of the United States (Truth Social)
- “our focus included ways to ensure safe transit that is to benefit of all dear neighbors and the world. Our neighbors are our priority.” — Abbas Araghchi, Iranian Foreign Minister (social media)
- “The diplomatic stand-off means that every day 10-13 million barrels of oil fail to get to the international market, worsening an already tight oil balance. Therefore, there is only one direction for oil prices to go,” — Tamas Varga, PVM Oil Associates analyst (Reuters)
- “The economic risks are larger than our crude base case alone suggests because of the net upside risks to oil prices, unusually high refined product prices, product shortages risks and the unprecedented scale of the shock,” — Daan Struyven, Goldman Sachs analyst (Reuters)
- “Talks around ‘peace’ still look largely superficial and lack concrete evidence of de-escalation. Despite the rhetoric, vessel movement through the Strait of Hormuz remains curtailed, and that prolonged disruption is what’s keeping oil risk premiums elevated,” — Priyanka Sachdeva, senior market analyst, Phillip Nova (Business Times)
What’s Next
Polymarket odds place a 36 % chance of a partial Hormuz reopening before 13 May and 57 % before 30 June. Analysts expect oil prices to stay elevated through May-June unless traffic improves. Central banks will monitor inflation pressures from higher energy costs ahead of upcoming rate decisions, while diplomatic channels via Pakistan, Oman, and Russia remain active but without a clear timetable for a ceasefire extension or strait reopening.
