Oil prices surge past $120 as US eyes prolonged Iran blockade
Oil prices have surged amid reports that the United States is preparing for a prolonged blockade of Iran.
The global benchmark, Brent crude, climbed above $120 per barrel on Wednesday, briefly reaching $122—its highest level since 2022.
According to the BBC, senior energy executives, including Chevron CEO Mike Wirth, met with US President Donald Trump at the White House on April 28 to discuss ways to shield American consumers from the impact of the conflict.
Market reactions suggest traders interpreted the meeting as a signal that the effective shutdown of the Strait of Hormuz could persist for an extended period.
A White House official said discussions covered issues such as domestic energy output, developments in Venezuela, oil futures, natural gas, and shipping, describing the session as part of routine engagements between the president and industry leaders.
The talks followed reports from The Wall Street Journal that President Trump had directed aides to prepare for a longer blockade of Iranian ports in an effort to pressure the country economically.
In response, Iran has vowed to continue disrupting traffic through the Strait of Hormuz, a crucial route that typically handles about 20% of global oil and liquefied natural gas supplies.
Shipping in the strait has already been heavily affected since the conflict began, with Iran restricting vessel movement following US and Israeli strikes launched on February 28. Tehran has also warned that ships approaching the area could be targeted.
The US has countered by announcing that its forces would intercept or turn back vessels heading to or from Iranian ports. BBC Verify reports that at least four ships departing Iranian ports have crossed the US blockade line.
Oil prices have been volatile throughout the conflict but remain significantly higher than pre-war levels. Brent crude had fallen to $90 per barrel on April 17 after a ceasefire between Israel and Lebanon and a temporary US pause in attacks on Iran, but prices have steadily climbed over the past 12 days as the blockade continues.
Lindsay James, an investment strategist at Quilter, said that while the immediate effect in the UK has been higher fuel costs, prolonged disruption could lead to shortages and rising prices across a wide range of goods.
Meanwhile, Iran’s economy is under growing strain, with soaring inflation, a weakening currency, and the threat of halted oil exports. Official data shows inflation has reached 53.7%, while the rial has dropped to a record low. The government also reported that around two million people have lost their jobs due to the conflict.
On Wednesday, President Trump urged Iran to reach an agreement, saying it should “get smart soon” after negotiations stalled. In a post on Truth Social, he criticised Tehran for failing to act decisively.
US officials told The Wall Street Journal that extending the blockade was seen as a less risky option compared to resuming military strikes or abandoning the confrontation altogether.
Iranian authorities, however, maintain they can withstand the pressure by using alternative trade routes.
The World Bank has warned that energy prices could rise by 24% in 2026 if major disruptions from the conflict persist.
Financial markets reacted cautiously, with European stocks closing lower and the FTSE 100 falling 1.2%. France’s CAC 40 and Germany’s DAX also posted losses, while the US S&P 500 ended the day flat. In contrast, Asian markets mostly gained as they continued recovering from the initial shock of the conflict.
Kathleen Brooks, research director at XTB, said investors are now adjusting to the likelihood of a prolonged blockade.
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