Crude oil prices extended gains on Tuesday, with Brent trading near $110.50 a barrel and U.S. West Texas Intermediate holding above $113, as markets awaited President Donald Trump’s 8 p.m. ET deadline for Iran to reopen the Strait of Hormuz or face strikes on energy infrastructure. The benchmarks are on track for their highest closes since June 2022, with WTI up 0.8% on the day and Brent settling just below $110 in prior session trade.
USOIL – 5 Days Chart
Market Snapshot
Brent crude (LCOc1) rose 0.7% to $110.45 a barrel by midday London trade, while WTI (CLc1) gained 0.9% to $113.20, both hovering near four-year highs. The May WTI contract briefly touched $114.60 in overnight electronic trading before paring gains as traders assessed the odds of a last-minute diplomatic breakthrough.
Deadline Details
Trump reiterated his ultimatum in a Monday evening statement, demanding Iran allow unrestricted passage through the strategic waterway by 8 p.m. ET Tuesday or face U.S. airstrikes targeting bridges, power plants, and energy facilities. The President said talks with Tehran were “going well” but emphasized that reopening Hormuz remained “a very big priority,” leaving markets uncertain whether military action would commence after the deadline expires.
Iran has denied direct negotiations are underway, contradicting U.S. claims of progress, and warned that any strikes would result in the strait being “completely closed”. Shipping data shows Hormuz transit volumes doubled in early April but remain well below normal capacity, with several cargo vessels still anchored awaiting safe passage.
Risk Flows and Correlated Moves
Equity markets showed mixed performance as energy shares outperformed while growth stocks lagged on inflation concerns. The S&P 500 (SPX) traded flat near 6,590, balancing gains in Exxon Mobil (XOM.N) and Chevron (CVX.N) against weakness in technology names. The Nasdaq 100 (NDX) slipped 0.3% as higher rate expectations pressured valuations.
The dollar index (DXY) strengthened 0.4% to 100.20, supported by safe-haven flows and hawkish Federal Reserve pricing after the oil shock. Gold (XAU) fell 0.5% to $4,655 an ounce as rising real yields offset haven demand, while the euro weakened 0.3% against the greenback on exposure to energy import costs.
Macro Implications
TD Securities estimates nearly 1 billion barrels of crude and refined products could be lost by month-end if the conflict extends through April, tightening global supply balances significantly. Goldman Sachs expects Brent to average $110 per barrel should hostilities persist, raising risks of demand destruction in Asia and Europe.
“Markets continue to be roiled by heightened uncertainty surrounding unprecedented Middle East geopolitical tensions that wreak havoc on inflation, growth, and oil supply outlooks,” UOB analysts said in a Tuesday note.
