Key Highlights
- Brent crude surged to $113.52 per barrel while WTI exceeded $100 amid escalating tensions over Hormuz Strait access
- President Trump issued ultimatum threatening strikes on Iranian power infrastructure if shipping lane remains blocked
- Energy infrastructure across nine nations has sustained damage to at least 40 facilities since regional hostilities commenced
- International Energy Agency drew parallels between current situation and combined impact of both 1970s oil crises
- Goldman Sachs revised 2026 Brent price projection upward to $85 per barrel from earlier $77 estimate
Crude oil markets continued their upward trajectory Monday as traders assessed President Trump’s ultimatum to Tehran regarding access through the Strait of Hormuz.
The international Brent crude benchmark advanced 1.2% to settle at $113.52 per barrel. Meanwhile, West Texas Intermediate gained 2.5%, closing at $100.71 per barrel. Brent has experienced a remarkable rally exceeding 50% since coordinated U.S. and Israeli military operations against Iran commenced in late February.
The President’s weekend statement demanded Iran “fully open” the strategic Strait of Hormuz within a 48-hour window, warning of potential strikes targeting Iranian electrical generation facilities. Iranian officials countered with promises to target critical infrastructure throughout the broader Middle East region.
Market specialists expressed considerable doubt regarding Iran’s willingness to meet such demands within the compressed timeframe. Rory Johnston, founder of Commodity Context Corp., stated: “Tehran appears highly unlikely to accept Trump’s conditions on such an aggressive schedule while facing military threats. Iran has demonstrated both capacity and resolve to respond to any escalation in kind.”
Treasury Secretary Scott Bessent clarified that American military operations focus on dismantling defensive positions surrounding the strait, emphasizing that Trump remains committed to “take whatever steps it takes” to prevent Iran from acquiring nuclear capabilities.
The Strait of Hormuz serves as a critical artery connecting Persian Gulf oil producers to international markets. Shipping activity through this vital waterway has declined to near-zero levels. Oil exporters in the Persian Gulf region face constraints, either storing millions of barrels domestically or utilizing scarce alternative shipping channels.
IEA Draws Comparisons to Previous Energy Crises
Fatih Birol, Executive Director of the International Energy Agency, addressed attendees at an Australian conference, characterizing the present disruption as matching the severity of both 1970s oil supply shocks combined with the 2022 European natural gas shortage following Russia’s Ukraine invasion — “all occurring simultaneously.”
Birol reported that hostilities have resulted in significant damage to at least 40 energy facilities distributed across nine countries. While the IEA continues deliberations about tapping strategic petroleum reserves, Birol emphasized that emergency stock releases alone would prove insufficient to address the underlying crisis.
The current confrontation has reached its 24th day, representing double the duration of comparable tensions between the same parties during last year’s episode.
Goldman Sachs Adjusts Price Projections Upward
Goldman Sachs announced revised oil price expectations for 2026 over the weekend. The investment bank now anticipates Brent crude averaging $85 per barrel throughout this year, representing an increase from their prior $77 projection. The WTI forecast received similar adjustment, climbing to $79 per barrel from $72.
“Current analysis suggests flows through Hormuz will operate at approximately 5% of typical capacity for six weeks before beginning gradual normalization,” wrote analysts led by Daan Struyven.
The team emphasized that price appreciation will likely continue until market participants develop conviction that extended disruption scenarios can be avoided.
Haris Khurshid, chief investment officer at Karobaar Capital, observed: “We anticipate more significant price movements once broader complications emerge affecting maritime transport or insurance markets.”
Amin Nasser, CEO of Saudi Aramco, has canceled his appearance at the annual CERAWeek conference scheduled in Houston this week, where petroleum market dynamics and regional conflict were anticipated as primary discussion topics.
