Oil surged above $100 a barrel after the U.S. military said it would begin enforcing a maritime blockade on traffic entering and exiting Iranian ports, escalating tensions around the Strait of Hormuz and threatening global crude flows.
Brent crude jumped as much as 7% to $101.91 a barrel in early Asian trading Monday, while West Texas Intermediate climbed nearly 8% to $104.16, reversing losses from the previous session as traders priced in fresh geopolitical risk to Middle East supply.
The move follows remarks by Donald Trump that the U.S. Navy would begin blockading maritime traffic linked to Iran after negotiations between Washington and Tehran failed to produce an agreement to end weeks of conflict. The U.S. Central Command later confirmed enforcement would begin at 10 a.m. ET Monday.
According to CENTCOM, the operation will target vessels entering or departing Iranian ports across the Arabian Gulf and Gulf of Oman, though ships transiting the Strait of Hormuz to and from non-Iranian destinations will not be restricted.
Energy markets reacted swiftly, with analysts warning the measures could effectively remove up to 2 million barrels per day of Iranian-linked oil from global supply routes.
“The market is now largely back to conditions before the ceasefire,” said Saul Kavonic, head of energy research at MST Marquee. “Blocking the remaining Iranian-linked flows through Hormuz materially tightens the outlook.”
The Strait of Hormuz handles roughly one-fifth of global oil shipments, making any disruption there a key driver of price volatility. Tanker-tracking data already shows some vessels steering clear of the chokepoint ahead of enforcement.
Iran’s Revolutionary Guards warned that military vessels approaching the area could be treated as violating the fragile two-week ceasefire, raising the risk of further escalation.
Despite the tensions, three fully laden supertankers successfully transited the strait over the weekend, the first such departures since the ceasefire was announced last week, suggesting some operators are still testing the corridor’s viability.
Separately, Saudi Arabia said it has restored full pumping capacity through its East-West pipeline to about 7 million barrels per day, offering an alternative export route that bypasses Hormuz and partially offsets disruption risks.
Still, the prospect of sustained restrictions on Iranian exports and renewed regional instability is expected to keep crude prices elevated in the near term, with traders closely monitoring military developments and shipping flows across the Gulf.
