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Oil prices climbed on Monday after the United States announced a naval blockade tied to Iranian ports, adding fresh pressure to an energy market already under strain from the conflict around the Strait of Hormuz.
Brent crude rose above $103 a barrel after weekend talks between Washington and Tehran ended without a deal. Meanwhile, analysts and oil executives said the latest move could tighten supply further and lift shipping costs across key trade routes.
Brent crude moved above $103 a barrel after the US said its naval action would begin at 10 a.m. New York time on Monday. The measure applies to vessels entering or leaving Iranian ports. As a result, traders began reassessing the scale of possible supply disruption in one of the world’s most important oil corridors.
Jorge Montepeque, managing director at Onyx Capital Group, said the market response remained limited compared with the risks tied to a broader enforcement action. He said the move to $103 did not reflect what could happen if the US fully carries out the interdiction. In his words, oil “should be $140, $150” under such a scenario.
However, Montepeque also said traders appeared unwilling to price in a more extreme outcome because blocking both sides of the strait still looked unlikely to many participants. Therefore, the relatively calm price action during the Asian session suggested that some investors expect the crisis to remain contained, at least for now.
While Brent futures rose above $100, physical crude prices in Europe moved far higher. North Sea Forties crude for immediate delivery reached $148.87 a barrel on Monday, according to LSEG data. This level surpassed its 2008 peak and showed that buyers were paying far more for cargoes available at short notice.
The wide gap between futures and physical prices points to tight prompt supply. In Europe and Asia, buyers are seeking barrels that can arrive quickly as shipping remains disrupted and confidence in normal flows through the Strait of Hormuz stays weak. Repsol Chief Executive Josu Jon Imaz said physical transactions were under “a lot of strain.”
At the same time, movement through the Strait has already slowed sharply since the start of the US-Israeli war on February 28. Iran has allowed only a limited number of ships to pass after vetting and authorization. According to maritime intelligence firm Windward, about 3,200 vessels were stranded west of the strait as of Saturday.
In addition, analysts said the blockade could push prices higher if it triggers retaliation elsewhere in the region. Montepeque said supply losses could reach as much as 12 million barrels a day in a worst-case scenario. Likewise, Trita Parsi of the Quincy Institute said oil could rise above $150 a barrel if the Houthis in Yemen respond by disrupting Bab al-Mandeb.
Bab al-Mandeb connects the Red Sea to the Gulf of Aden and the Indian Ocean. It also serves as an alternative export route for Gulf oil and gas. Consequently, any disruption there would add another obstacle for global energy shipments.
Anas Alhajji, former chief economist at NGP Energy Capital Management, said many non-Iranian ships may still avoid Hormuz because of insurance costs and fears of retaliation. He said the blockade of Iranian ports would, in practice, amount to a blockade of the Hormuz Strait.
Moreover, analysts said higher oil and gas prices could raise costs for chemicals, fertilisers, plastics, and other raw materials within weeks. Supply chain experts also warned that if disruptions continue into late April and early May, manufacturers and importers could face broader pricing pressure across several sectors.
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