Brent crude rose $3.56, or 3.42%, to $107.77 per barrel, while U.S. West Texas Intermediate (WTI) gained $4.11, or 4.19%, to $102.18. The move extended Monday’s gains as markets continued rebuilding geopolitical risk premiums tied to the ongoing conflict and the effective closure of the Strait of Hormuz.
The latest rally was driven largely by deteriorating prospects for a near-term peace agreement. U.S. President Donald Trump described ceasefire negotiations as being “on life support,” while Iran maintained demands including an end to hostilities across the region, removal of the U.S. naval blockade, restoration of Iranian oil exports, sanctions relief, and compensation for war damage.
Markets remain particularly focused on the Strait of Hormuz, which normally handles roughly 20% of global oil and liquefied natural gas flows. Iran’s continued emphasis on sovereignty over the strait reinforced fears that shipping disruptions may continue for months rather than weeks.
Adding to bullish sentiment, the U.S. Energy Information Administration revised its outlook and now expects the strait to remain effectively closed through at least late May, extending prior assumptions that disruptions would ease sooner. The agency also warned that even after shipping resumes, global oil production and trade flows may not fully normalize until late 2026 or early 2027.
Supply losses continue to mount. The EIA estimates roughly 10.5 million barrels per day of Middle Eastern production were disrupted during April, with losses potentially rising further as storage constraints force additional shut-ins. Other industry estimates suggest the disruption may be even larger, with some analysts placing the effective supply gap closer to 14 million barrels per day.
At the same time, tightening inventories are beginning to emerge globally. OPEC production has fallen to multi-decade lows, U.S. crude and fuel inventories are expected to decline again, and strong U.S. export demand continues to drain available supplies from international markets.