Oil prices surged over the weekend, with U.S. crude surpassing $114 per barrel, following President Trump’s ultimatum to Iran regarding the reopening of the Strait of Hormuz. As tensions escalate, U.S. crude oil futures for May settled at $112.08 per barrel, while Brent prices for June reached $110.47. Trump’s threats to target Iranian infrastructure have raised concerns about further disruptions in a critical maritime route that accounts for approximately 20% of global oil supplies.

The ongoing conflict has triggered unprecedented supply disruptions, with estimates suggesting nearly 1 billion barrels will be lost by month-end. Analysts from TD Securities and Rapidan Energy project significant losses in crude and refined products, exacerbating the already volatile market. Although OPEC+ has agreed to increase production by 206,000 barrels per day in May, the effectiveness of this measure is uncertain given the closure of the Strait and ongoing attacks on oil infrastructure.

Market participants should brace for continued price volatility and supply chain challenges, particularly as geopolitical tensions remain high and the potential for further military actions looms.

Source: cnbc.com