Oil Prices Surge After Trump's Iran Ultimatum on Strait of Hormuz Closure

• Oil prices climbed after US President Donald Trump threatened Iran over the closure of the Strait of Hormuz, with Brent crude rising 1.4% to USD 110.60 and US crude increasing 1.8% to USD 113.60.
• Trump issued a strong warning on Truth Social, stating Iran would face severe consequences if the Strait remained closed, following a previous ultimatum extension.
• A senior Iranian official responded, asserting the waterway would stay closed until the country is "fully compensated" for war damages.
• Oman's foreign ministry confirmed meetings with Iranian officials to discuss terms for resuming merchant ship passage through the Strait.
• OPEC+ nations agreed to a production adjustment of 206 thousand barrels per day (kbd) starting May 2026, with Saudi Arabia and Russia contributing 62 kbd each, to support market stability.

Key Questions Answered

How will oil prices change if the Strait of Hormuz closes?

If the Strait of Hormuz closes, oil prices could surge to $150-$200 per barrel. This disruption affects approximately 20% of global oil supply.

What is OPEC's long-term strategy for oil production?

OPEC+ plans to increase oil output by 206,000 barrels per day in May. This decision aims to ensure market stability amid global uncertainties and geopolitical tensions.

Could US-Iran tensions escalate further?

Yes, US-Iran tensions could escalate further.