Oil Surges, Hormuz Remains Key Threat
Oil prices surged after US President Donald Trump vowed to increase military pressure on Iran in the next two to three weeks, fading hopes of a quick de-escalation. West Texas Intermediate (WTI) briefly surpassed US$110 per barrel, and Brent neared the same level, reflecting a widening supply risk premium while the Strait of Hormuz remains effectively closed and energy flows remain severely restricted.
The rise wasn't limited to crude oil. Refined product markets heated up even more sharply, with European diesel futures surging above US$200 per barrel for the first time since 2022. These movements underscore the risk of global inflation, particularly as buyers scramble for available cargoes and some shipments must travel longer routes to secure supplies.
Trump called the war a "success" and said Hormuz would open "naturally" after the conflict ends, without specifying a mechanism or timetable. French President Emmanuel Macron called it unrealistic to open the strait by military means, deepening the conflict between allies and heightening uncertainty about the route to normalizing supplies.
In the physical market and price structure, signs of tightness are becoming increasingly extreme. The nearest WTI contract is trading at more than US$11 per barrel above the next-month contract, a premium reflecting short-term supply shortages. Although futures briefly closed near US$101 on Wednesday, the benchmark Dated Brent for physical barrel prices was reported at around US$128, underscoring the tight market conditions off-screen.
Pressure is not expected to ease as long as flows through Hormuz remain unrecovered. Brent is said to be around 50% higher than before the war, while analysts believe Trump's speech has not changed the underlying market reality: the strait remains closed and supply disruptions could continue for at least several weeks.
The risk of volatility is also heightened as the market faces the long Easter holiday, when oil contracts are not traded on Friday. With a longer risk window without price discovery, market participants tend to increase the uncertainty premium, particularly in energy assets.
The Hormuz standoff remains a hot spot. Trump previously threatened attacks on Iranian infrastructure if the strait was not opened, then called on other countries to take over securing the waterway; the United Arab Emirates is among those pushing for a UN mandate for the use of force. Iran insists the future of the strait is up to Iran and Oman and rejects opening it based on the US president's "absurd display," while Iranian officials have expressed readiness for any scenario and called US demands "maximalist and illogical."
In the latest price update, Brent crude for June delivery rose to US$109.22 per barrel at 8:13 a.m. New York time, while WTI crude for May delivery jumped about 10% to US$110.26. (gn)
Source: Newsmaker.id
