Oil prices experienced a significant increase following U.S. President Donald Trump’s renewed threats against Iran, particularly regarding the closure of the Strait of Hormuz. As tensions heightened, West Texas Intermediate crude futures for May rose more than 2%, trading at $112.41 per barrel, while Brent crude for June delivery climbed approximately 1.3% to $109.77 per barrel.
During a press briefing, Trump reiterated his ultimatum to Iran, stating that if Iranian leadership did not re-open the crucial shipping route by 8 p.m. ET on Tuesday, the U.S. would take drastic action against the nation’s civil infrastructure, with dire implications for its power plants and bridges. This escalated rhetoric comes amid ongoing conflicts, which have already caused substantial shocks to oil and fuel prices since fighting erupted on February 28.
“Their deadline is tomorrow,” Trump announced. “Now we’ll see what happens. I can tell you they are negotiating; we think in good faith. We’re getting the assistance of some incredible countries that want this to come to an end, as it affects them too.”
Reports from Reuters indicated that U.S. and Iranian officials were engaged in discussions to establish a framework for resolving the ongoing conflict. However, the Iranian government has pushed back against Trump’s demands to promptly reopen the Strait of Hormuz. Instead, Tehran presented its own plan, comprising ten points that demand a comprehensive cessation of hostilities in the region, implementation of safe passage protocols through the Strait of Hormuz, lifting of economic sanctions, and a commitment to reconstruction efforts.
Despite these negotiations, the likelihood of reaching a ceasefire before the deadline appears slim. Trump characterized the Iranian proposal as “significant” but fell short of declaring it adequate, stating, “We will see what happens.”
The situation remains fluid, with market analysts expressing concern over the unpredictable nature of the conflict. Ed Yardeni, president of Yardeni Research, captured the uncertainty surrounding the negotiations, remarking, “The fog of war remains thick.” He emphasized that market investors are left in a precarious position, trying to reconcile the possibility of an imminent resolution with the risk of further escalation.
As the negotiations unfolded, traffic through the Strait of Hormuz saw a slight uptick with the transit of eight tankers on Monday, an increase from less than two per day recorded in March. However, this remains drastically below the pre-war average, which saw roughly 20 million barrels of crude oil and petroleum products passing through the strait daily in 2025.
Michael Wan, a senior currency analyst at MUFG Research, observed that while there was a marginal improvement in shipping flows from the Strait of Hormuz, the prospect of achieving peace remains “narrow and unlikely,” given the stark discrepancies in expectations among the conflicting parties.
He asserted that a full resumption of oil traffic through the vital waterway would necessitate considerable time, forecasting at least three to six months for supply chains to adequately respond and stabilize, particularly for economies in Asia facing growing energy shortages.
