WASHINGTON (dpa-AFX) - Rebounding from Friday's plunge, crude oil has surged on Monday after U.S. President Donald Trump imposed a blockade on ships transiting to and from Iran via the Strait of Hormuz.
WTI Crude Oil for May month delivery was last seen trading up by $2.67 (or 2.76%) at $99.24 per barrel.
After the U.S. and Iranian delegations failed to reach an amicable deal in their bilateral talks hosted by Pakistan on Saturday, Trump announced that the U.S. navy would enforce a blockade of all ships entering or leaving the Strait of Hormuz in the Persian Gulf, starting 10:00 A.M. EDT (or 05:30 p.m. in Iran), April 13.
Trump's moves, according to analysts, are aimed at curtailing Iran's oil exports, which went on seamlessly even during the gulf war, and thereby, stumble its economy.
Vowing a strong and forceful response, Iran's Islamic Revolutionary Guards Corps stated that the enemies would be trapped in its 'deadly vortex' if they miscalculate Iran's responsiveness. The IRGC has asserted its full control of the Strait of Hormuz traffic.
Around 10 days before, Trump served an ultimatum to Iran to either open up the Strait of Hormuz it has blocked since the beginning of the gulf war on February 28 or face disastrous military attacks.
Last Wednesday, the situation cooled off after Trump messaged through his social media platform Truth Social that he has halted all proposed attacks on Iran for two weeks.
On its part, Iran allowed restricted movement across the seaway for only 15 ships per day.
However, ship owners were reluctant to fully resume operations of their fleet to avoid navigating over the sea mines planted by Iran. Iran later offered a map providing an alternative route to avoid sea mines.
On Saturday, a high-level delegation from the U.S., headed by U.S. Vice President JD Vance, met Iranian counterparts in Islamabad (Pakistan's capital) to formulate a framework for discussions and work on measures needed to end the hostilities.
However, Trump announced that despite 20 hours of consultations, Iran refused to retract its nuclear ambitions which Trump stated was very dangerous and issued the blockade orders.
Following that, the threat of an expansive war in the gulf gripped markets, which triggered supply-related concerns, catapulting oil prices.
U.S. Central Command announced that it impartially will block vessels from all nations entering or exiting Iran's ports across the strait. Shipping activity in the strait has come to a virtual halt.
A few experts are predicting that the U.S. could attempt to take control of Kharg Island, which serves as the base from which Iran exports around 90% of its oil and energy, and thereby cripple Iran's economy.
Operation Epic Fury has already disrupted gulf's energy exports and shipping, destroyed several massive infrastructures, hit tourism to the gulf, and has resulted in long-term environmental damages including oil spills and toxic smoke.
Meanwhile, citing the war, OPEC has lowered its second-quarter global oil demand forecast by 500,000 barrels per day.
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