Alexander Manczuk | reuters
Oil rose on Thursday as signs of a prolonged US blockade of Iranian exports and stalled nuclear talks stoked fears supplies will remain tight for longer.
The gains came after Axios reported that Trump had rejected Tehran’s proposal to reopen the Strait of Hormuz, signaling that the naval blockade would remain in place until a comprehensive nuclear deal is reached.
Brent crude rose 1.96% to nearly $120 a barrel, while U.S. West Texas Intermediate rose 0.2% to $107.09.
Prices rose on Wednesday as the Wall Street Journal, citing US officials, reported that US President Donald Trump had instructed allies to prepare for an extended blockade of Iran.
Data provided by Goldman Sachs showed oil prices reaching their highest level since mid-2022.
The bank estimates exports through the Hormuz chokepoint have fallen to just 4% of normal levels, while US-Iran talks are stalled and supplies are tightening due to the US blockade.
Disrupted Iranian exports and limited storage capacity could deepen supply disruptions if the blockade continues, bank analysts said. He said output growth from the UAE following OPEC’s exit is likely to occur more slowly in the medium term rather than offset near-term tightness.
However, the bank flagged emerging risks of demand decline, noting that global oil consumption in April could fall by about 3.6 million barrels per day from February levels, with weakness concentrated in jet fuel and petrochemical feedstocks.
