Strait of Hormuz blockade
The U.S. announced a military blockade of Iranian ports in the Strait of Hormuz, sending U.S. crude above $104 a barrel amid fears of supply disruption. Markets are pricing both a real supply shock and the possibility of diplomatic containment, with some forecasters raising year‑end oil-price forecasts as flows from Gulf exporters fall (cbsnews.com).
The United States has started blocking ships that enter or leave Iranian ports, and oil prices jumped back above $100 a barrel. (cbsnews.com) President Donald Trump announced the move on Sunday, April 13, and United States Central Command said it applies to vessels of all nations using Iranian ports and coastal areas on the Arabian Gulf and Gulf of Oman. West Texas Intermediate crude rose to $104.24 a barrel and Brent crude reached $102.29 after the announcement. (cnbc.com) (cbsnews.com) The blockade is aimed at Iran’s oil exports after weeks of Iranian restrictions in the Strait of Hormuz during the United States-Israeli war with Iran. CNBC reported that Iran produces about 4% of the world’s oil and sells most of it to China. (cnbc.com) The Strait of Hormuz is a narrow sea lane between Iran and Oman that links the Persian Gulf to the open ocean. The International Energy Agency said 20 million barrels a day of crude oil and oil products moved through it in 2025, about 25% of the world’s seaborne oil trade. (iea.org) The waterway is only 29 nautical miles wide at its narrowest point, with 2-mile shipping channels in each direction, so even partial disruption can slow traffic fast. The International Energy Agency said countries including Iraq, Kuwait, Qatar, Bahrain and Iran rely on the strait for most of their oil exports. (iea.org) The risk is not limited to crude oil. The International Energy Agency said about 93% of Qatar’s liquefied natural gas exports and 96% of the United Arab Emirates’ liquefied natural gas exports also pass through the strait, equal to 19% of global liquefied natural gas trade. (iea.org) Markets are also trading on the idea that the disruption may not last. JPMorgan said on April 10 that prices implied traders expected about half of normal Hormuz flows to return by May and a full resumption by June, while Goldman Sachs said Brent would stay above $100 through 2026 if the shutdown lasted another month. (bloomberg.com 1) (bloomberg.com 2) There are signs the blockade is not airtight. NBC News reported that a sanctioned China-linked tanker transited the strait on Tuesday, and The New York Times reported that ship-tracking data showed several vessels moving even after the United States action began. (nbcnews.com) (nytimes.com) Iran has called the move piracy, while China called it dangerous, and talks to get Washington and Tehran back to the table were still being pushed on Tuesday, April 14. For now, the market is treating Hormuz as both a military flashpoint and a negotiation that could still unwind. (aljazeera.com) (cbsnews.com)
