No signs of price deceleration in the oil market as supply chokehold tightens
The global economy is facing a nightmare without end as the Middle East remains engulfed in flames. With Brent crude shattering every safety barrier to soar to $126 per barrel, markets are watching with bated breath as energy strangulation takes hold. Threats of military action and a naval blockade in the Strait of Hormuz constitute a grim reality that threatens to blow the global supply chain apart. With analysts now openly warning of oil reaching $150, fears are spreading that the global economy will be unable to withstand the looming crash.
Brent reaches 4-year peak
Following reports that US armed forces will brief President Donald Trump on potential action against Iran, the price of Brent touched a four-year high. This surge stems from escalating concerns over a resumption of armed conflict, while simultaneously tightening the American blockade on Iranian exports. Specifically, according to Axios, US Central Command (CENTCOM) was set to present Trump with plans for possible military action against Iran, citing two sources with knowledge of the matter. Reports indicate that Trump had previously rejected an Iranian proposal to reopen the Strait of Hormuz, signaling that the naval blockade will remain in effect until a broader nuclear deal is reached. June futures for Brent rose by 6.84% to $126.10 a barrel, while American West Texas Intermediate gained 3.14% to reach $110.24. LSEG data shows that Brent has skyrocketed to its highest levels since early 2022, as the Middle East conflict "strangles" supply.
Oil reserves under pressure
Goldman Sachs estimates that exports through Hormuz have plummeted to just 4% of normal levels, while stalled US-Iran negotiations and the ongoing blockade restrict inventories. The limited Iranian exports and restricted storage capacity could exacerbate supply disruptions if the blockade continues, analysts from the American investment firm stated. According to the same sources, the production increase from the United Arab Emirates following its exit from OPEC is likely to be implemented gradually in the medium term, rather than offsetting the current market tightness.
Meanwhile, the US President appeared to threaten Iran with a post on Truth Social on Wednesday (April 29, 2026), saying the country "must come to its senses soon!". "Iran cannot get its act together. They don’t know how to sign a non-nuclear deal. They better come to their senses soon!" Trump stated. The post was accompanied by an AI-generated image depicting Trump holding a weapon with explosions in the background and the caption: "NO MORE MR. NICE GUY!".
For his part, Bill Perkins, Chief Investment Officer at Skylar Capital Management, stated that oil markets are being driven by a combination of physical disruptions, geopolitics, and investor psychology, with traders closely monitoring tanker movements and political signals as the US-Iran dispute lingers. "We are quite far from a deal, and perhaps it takes hostilities or a bit more time for the Strait of Hormuz to open," he noted. While strategic reserves and crude already in transit have helped absorb price shocks, he characterized refined product markets as significantly more stressed, highlighting sharp increases in diesel prices and persistent supply issues, even if a ceasefire is achieved.
The $150 oil nightmare
Goldman Sachs pointed to emerging downside risks for demand, noting that global oil consumption in April may be approximately 3.6 million barrels per day lower than February levels, with weakness focused on jet fuel and petrochemical feedstocks. Looking ahead, Perkins estimated that oil could surge toward $140–$150 per barrel if disruptions persist, though elevated prices would eventually curb demand.
Analysts generally believe that the duration of navigation restrictions in the Strait of Hormuz directly determines how long energy prices will remain at peak levels. The longer both persist, the heavier the cost will be for the global economy. S&P Global Ratings has proceeded with a significant revision of its oil price forecasts, increasing its estimates for WTI and Brent by $15 per barrel for the remainder of 2026 and by $5 for 2027. Its report notes that "the scale of supply losses continues to widen, far exceeding previous expectations". Analysts at ANZ Research also stated that crude oil prices show no signs of slowing their ascent, as the prospect of a prolonged Hormuz closure continues to weigh on market sentiment. This rally in oil prices sends a clear message that investors are bracing for a long-term conflict, and oil supply from the Persian Gulf is likely to remain restricted.
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