Key Highlights
- Brent crude advanced beyond $106 per barrel on Thursday, marking approximately a 4% increase, while West Texas Intermediate reached $93.66
- The Strait of Hormuz continues to operate under severe restrictions, blocking approximately 20% of worldwide petroleum transport
- Tehran dismissed diplomatic approaches from Washington and Iranian legislators are preparing legislation to impose transit charges for vessels navigating the strait
- BlackRock’s leadership cautioned that crude could reach $150 per barrel regardless of immediate diplomatic breakthroughs
- American policymakers are conducting confidential assessments on economic impacts should prices reach $200 per barrel
Energy markets experienced significant volatility on Thursday as diplomatic efforts between Washington and Tehran yielded minimal progress. Brent crude advanced approximately 4% to reach $106.34 per barrel. West Texas Intermediate gained 3.7% to settle at $93.66.
The upward movement followed a previous session where prices declined more than 2%, fueled by tentative hopes surrounding diplomatic discussions. Those expectations dissipated rapidly.
Tehran officially dismissed reports of direct dialogue with Washington. Iranian authorities emphasized that substantial disagreements persist and presented their own requirements, particularly regarding complete authority over the Strait of Hormuz.
Washington countered these claims, maintaining that discussions continue. President Trump stated during a Wednesday evening fundraiser that Iran “wants to make a deal so badly, but they’re afraid to say it.”
Iranian lawmakers are developing legislation that would impose fees on vessels transiting the strait in return for security assurances. The proposal is anticipated to reach completion within the coming week, according to reports from the semi-official Fars news agency.
The Strait of Hormuz represents a critical maritime chokepoint linking the Persian Gulf to international commerce routes. Roughly 20% of global petroleum moves through this passage. Following hostilities that commenced in late February, tanker movement through the strait has diminished dramatically.
Vessels attempting passage under Iranian oversight must submit crew rosters, cargo manifests, and journey details to the Islamic Revolutionary Guard Corps ahead of obtaining authorization.
Crude Vulnerable to Additional Price Surges
BlackRock president Rob Kapito suggested market participants might be downplaying existing threats. During remarks at a Melbourne gathering on Thursday, Kapito indicated crude could climb to $150 per barrel even with immediate cessation of hostilities, given the extended timeline required for supply network restoration.
American government officials are simultaneously conducting private evaluations of scenarios involving $200 per barrel crude, according to sources with knowledge of these discussions.
Brent crude is tracking toward its largest monthly increase since 1990. Earlier this month, prices had surged near $120 per barrel before moderating.
A drone attack damaged a Turkish tanker transporting Russian crude near Istanbul in the Black Sea on Wednesday, introducing additional uncertainty for traders monitoring multiple regional conflicts.
Worldwide Economic Strain Intensifying
Research teams at Capital Economics cautioned that extended supply disruptions could generate economic consequences comparable to those experienced after Russia’s Ukraine invasion in 2022, potentially prompting central banks to resume interest rate increases.
Nations throughout Asia are experiencing mounting economic strain. Thailand increased gasoline prices by up to 22% on Thursday. The Philippines halted its wholesale electricity spot market operations. Agricultural producers in India and China are confronting elevated costs for agrochemical inputs.
Fuel prices at American service stations have climbed consistently since hostilities began.
The White House confirmed on Thursday that a planned summit between President Trump and Chinese leader Xi Jinping has been moved to May 14–15 in Beijing
