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Oil Pushes Higher as Clock Ticks on Trump’s Hormuz Ultimatum

(Bloomberg) -- Oil gained from the highest close since mid-2022, as investors assessed President Donald Trump’s two-day ultimatum to Iran to reopen the Strait of Hormuz and Tehran’s threat of reprisals.

Brent rose above $113 a barrel, up for a fifth day, while West Texas Intermediate was near $100. Trump said Iran must “fully open” the waterway within 48 hours, or have its power plants bombed. Tehran warned it would attack key infrastructure across the Middle East if Trump followed through.

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Global benchmark Brent has surged by more than 50% since the strikes by the US and Israel on Iran began in late February. The conflict has shown no signs of abating, with key petroleum-product markets rallying even harder than crude. That’s threatened to unleash a wave of global inflation, bringing turmoil to financial markets from commodities to stocks and bonds.

“Now with this 48-hour deadline, Trump has posted himself into a corner,” said Rory Johnston, oil market researcher and founder of Commodity Context Corp. “It is highly unlikely that Tehran will agree to Trump’s terms on such an accelerated timeline under the threat of attack. And Iran is clearly able and willing to match any escalation.”

International Energy Agency Executive Director Fatih Birol told a media event in Canberra, Australia, that the effect of the current disruptions was equivalent to the two major oil crises in the 1970s, and the 2022 natural gas crisis after Russia invaded Ukraine, “all put together.”

Goldman Sachs Group Inc raised its 2026 Brent forecast to $85 a barrel from $77, saying flows via Hormuz are now expected to be 5% of normal levels for six weeks, before a gradual recovery. “On the physical side, the largest oil supply shock ever is still mostly a local shock, leading to extreme declines in oil in transit and tightness in Asia,” analysts including Daan Struyven said in a March 22 note, which didn’t address Trump’s ultimatum.

Israel continued to hit Iran on Monday, after the Islamic Republic fired missiles and drones at targets across the region the day before. The conflict has entered its 24th day — twice as long as a crisis between the three nations last year, when Washington bombed Iran’s nuclear sites.

Still, part of the growing challenge for investors — beyond fatigue and extraordinary levels of volatility — has been Trump’s lack of coherent messaging on the conflict. Shortly before his two-day Hormuz ultimatum — which came at 7:44 p.m. New York time on Saturday — the president had said he was considering “winding down” US military efforts.

“The next real move needs something tangible, and not just escalation rhetoric,” said Haris Khurshid, chief investment officer at Karobaar Capital LP in Chicago. “It will probably take more broader issues with shipping or insurance before prices start moving more aggressively,” he added.

After weeks of war across the energy-rich region that’s affected more than a dozen states, the near‑complete closure of Hormuz — which links the Persian Gulf to global markets — has become a key flashpoint. Still, Iranian officials have been increasingly reluctant even to discuss reopening the critical trade artery as they focus on the government’s survival.

With maritime traffic through Hormuz at a standstill — apart from a handful of transits agreed to by Tehran — Persian Gulf crude producers have locked in millions of barrels of supply, or turned to limited, alternative export routes.

Treasury Secretary Scott Bessent said attacks on Iran are aimed at destroying fortifications along the strait. Trump will “take whatever steps it takes” to achieve goals including destroying Iran’s air force and navy and denying it the ability to have nuclear weapons,” he told NBC’s

The outlook for oil-market balances, prices, and the war looks certain to dominate discussions in Houston this week at the annual CERAWeek conference by S&P Global, a staple of the industry’s calendar. However, the worsening situation means that Saudi Aramco Chief Executive Officer Amin Nasser will no longer participate, according to a person familiar with the matter.

--With assistance from Will Kubzansky.