Strait blockade sends oil up
A U.S. naval blockade and collapsed Iran talks sent oil back above $100 a barrel, knocking markets into a higher‑for‑longer rate stance and pushing investors to price out near‑term Fed cuts. The move tightened inflation expectations and lifted the dollar as markets rebalanced around energy risk rather than central‑bank signalling. (indianexpress.com (reuters.com)
Oil jumped back above $100 a barrel on April 13 after the United States began blocking ships to and from Iranian ports and weekend talks with Tehran ended without a deal. (reuters.com) United States crude for May delivery rose more than 2% to close at $99.08, while Brent crude for June delivery gained more than 4% to settle at $99.36 after the blockade took effect at 10 a.m. Eastern Time, according to CNBC. Al Jazeera reported Brent briefly topped $103 in early trading. (cnbc.com) (aljazeera.com) President Donald Trump said the United States military would interdict ships entering or leaving Iranian ports, while United States Central Command said traffic to non-Iranian ports would not be impeded. Iran’s Defense Ministry warned that foreign policing of the strait would deepen the crisis, and Tehran threatened Gulf neighbors’ ports after the Islamabad talks collapsed. (reuters.com) (cnbc.com) The Strait of Hormuz is the narrow sea lane that carries roughly one-fifth of the world’s oil in normal conditions. Reuters reported Britain and France would not join the blockade, and CNBC said tanker traffic had already plunged before the United States move. (reuters.com) (cnbc.com) Markets treated the oil move as an inflation shock, not just a war headline. A Reuters commodities report said a stronger dollar and higher energy prices on April 13 fed inflation worries and weakened expectations for Federal Reserve rate cuts this year. (reuters.com) That shift showed up across asset classes. Reuters said gold fell to a near one-week low on April 13 as the dollar firmed, while Al Jazeera reported stock indexes in Japan and South Korea opened lower as traders reassessed the risk of a longer disruption. (reuters.com) (aljazeera.com) The price swing followed a violent month in oil. Al Jazeera reported Brent had traded above $119 in March, then fell below $92 last week after a two-week ceasefire was announced, before reversing again once the April 12-13 talks failed. (aljazeera.com) Even after the breakdown, both sides left a narrow diplomatic opening. A United States official told Reuters there was still “forward motion” toward an agreement, and The Indian Express reported on April 14 that negotiators could return to Islamabad as soon as Thursday. (reuters.com) (indianexpress.com) For now, traders are pricing the strait as a live supply risk again. As long as the blockade stays in force and tanker traffic remains far below the roughly 130 daily transits seen before the war, oil will keep trading on military decisions as much as on central banks. (aljazeera.com)
