Brent hits $106 per barrel

Brent crude was trading near $106 a barrel on April 24 after the Iran war and renewed Strait of Hormuz disruptions pushed oil back toward triple digits. (ft.com) (aljazeera.com) The Financial Times commodity page showed Brent at $105.88 late April 24, up 59.22% over 12 months. Al Jazeera reported Brent had risen above $106 on April 24 as Washington and Tehran remained deadlocked after tit-for-tat vessel seizures. (ft.com) (aljazeera.com) The Strait of Hormuz is the narrow waterway between the Persian Gulf and the Arabian Sea that carries a large share of the world’s seaborne crude. Vortexa said on April 14 that about 17.7 million barrels a day of mainstream seaborne oil supply had been curtailed with the strait mostly closed since the conflict began. (vortexa.com) Shipping data showed the disruption was not just theoretical. Lloyd’s List reported cargo-carrying vessel traffic through Hormuz fell 38% in a single day to 72 ships, while major crude tankers stopped making traceable passings during the worst of the disruption. (lloydslist.com 1) (lloydslist.com 2) That matters because oil prices move on expected supply, not just barrels already lost. CNBC reported Brent had surged more than 55% since the Iran war began and briefly neared $120 at its peak on fears that Hormuz flows would be choked off. (cnbc.com) Banks have been sketching out what a longer disruption would cost. Bloomberg reported on April 20 that Citigroup saw Brent reaching $110 if Hormuz traffic stayed disrupted for another month, and on April 9 that Goldman Sachs said Brent could average above $100 through 2026 if the strait stayed shut for another month. (bloomberg.com 1) (bloomberg.com 2) The market has also been whipsawed by ceasefire headlines. Bloomberg reported Brent fell below $100 on April 8 after a two-week halt in fighting was announced, then rebounded as traders focused on how quickly Hormuz could reopen and whether the truce would hold. (bloomberg.com) Airlines have already adjusted schedules around the conflict zone. Lufthansa said all Lufthansa Group airlines would suspend flights to the region through April 30, with flights to and from Tel Aviv suspended through May 31 for most group carriers. (lufthansa.com) For consumers and central banks, the immediate issue is that crude near $106 keeps fuel, freight and airline costs under pressure. As long as traders are pricing Hormuz as a live choke point, oil is likely to stay tied to each new shipping and ceasefire headline. (ft.com) (bloomberg.com)