Oil hits $104, up 8% on Trump Iran blockade move

ALBAWABA- Oil prices surged more than 8 per cent in early trading on Monday, with Brent crude breaking above $104 per barrel for the first time since the outbreak of the US–Iran conflict, after the United States imposed an immediate naval blockade on Iranian maritime routes.

The sharp rally followed the breakdown of Pakistan-brokered ceasefire talks in Islamabad and President Donald Trump’s announcement that the U.S. Navy would begin intercepting vessels entering and exiting Iranian ports, including operations in the strategically vital Strait of Hormuz.

In statements on Truth Social, Trump said the measures were intended to pressure Iran over its nuclear programme and would remain in place until Tehran accepted what he described as an “all in, all out” arrangement for the waterway.

Markets reacted swiftly to the escalation, with traders pricing in the potential removal of around 2.5 million barrels per day of Iranian crude and condensate from global supply. Strict enforcement of the blockade could further tighten the market by 1.8 to 2.2 million barrels per day, compounding existing OPEC+ production cuts.

The spike also reflects broader regional risk concerns following recent disruptions to Gulf energy infrastructure, including drone strikes on facilities in Saudi Arabia, Kuwait, and the United Arab Emirates. Although Saudi Aramco restored full output within days, the attacks heightened fears over supply chain vulnerability.

West Texas Intermediate also crossed the $100 threshold, while futures curves showed steep backwardation, indicating acute short-term supply stress.

The Strait of Hormuz, through which a significant share of global oil exports flows, remains a critical flashpoint, with any further escalation or Iranian retaliation likely to drive additional volatility in global energy markets.