Oil Surges Past $100 as US Prepares Strait of Hormuz Blockade

Oil prices climbed sharply on Monday, rising above $100 per barrel as the United States moved closer to enforcing a maritime blockade targeting Iranian shipping routes, intensifying concerns over global energy supply.

Brent crude futures jumped by more than 7 per cent to $102.16 a barrel in early trading, while US West Texas Intermediate rose over 8 per cent to $104.69. The gains came after losses in the previous session, reflecting how quickly markets reacted to renewed geopolitical risks.

The surge follows remarks by Donald Trump, who confirmed that the US Navy would begin blocking vessels linked to Iran in and around the Strait of Hormuz. The announcement came after negotiations between Washington and Tehran failed to produce an agreement to end the ongoing conflict, casting doubt over a fragile ceasefire.

According to United States Central Command, the blockade will apply to ships entering or leaving Iranian ports, including those along the Arabian Gulf and Gulf of Oman. However, vessels transiting the strait to non-Iranian destinations are expected to be allowed passage.

Market analysts say the move could significantly disrupt oil flows. Saul Kavonic, head of energy research at MST Marquee, said the blockade may cut off up to two million barrels per day of Iranian-linked supply. This has effectively returned the market to conditions seen before the ceasefire, when supply risks were already elevated.

The reaction in oil markets highlights the sensitivity of global energy prices to developments in the region. Analysts note that even the threat of enforcement has been enough to push prices higher, as traders factor in the risk of reduced supply and shipping disruptions.

Shipping activity has already been affected. Data shows oil tankers have begun avoiding the Strait of Hormuz ahead of the planned enforcement, although a small number of fully loaded supertankers managed to pass through over the weekend. The strait remains one of the world’s most critical energy chokepoints, handling a significant portion of global oil exports.

Iran has warned against the move, with the Islamic Revolutionary Guard Corps stating that any foreign military vessels approaching the area could be treated as violating the ceasefire.

Meanwhile, Saudi Arabia said it has restored full capacity on its East-West pipeline, which can transport up to seven million barrels per day, offering an alternative route that bypasses the strait.

Despite this, analysts caution that sustained disruption in the region could keep prices elevated in the near term, adding pressure to global inflation and increasing uncertainty for energy markets.