Oil Surges Past $110 as Iran-US Stalemate Chokes Hormuz Traffic

Oil prices have climbed sharply, pushing global energy costs higher and raising fears of renewed inflation just as many economies were regaining stability. Brent crude futures rose 0.9 percent to $111.34 a barrel on Friday, according to trading data, after the June contract briefly hit $126.41 before expiry. West Texas Intermediate held near $105. The increases come despite a Pakistan-brokered ceasefire in place since April 8. That agreement was meant to create space for talks on Iran's nuclear program. Instead, restrictions on the Strait of Hormuz and a U.S. naval blockade of Iranian ports have kept roughly one-fifth of the world's seaborne oil and LNG supply under pressure.

The central tension remains unresolved: can diplomacy restart flows through the strait before the economic damage spreads further? Iran has imposed controls on vessels in the waterway, according to Iranian state media and shipping trackers. The U.S. began blockading Iranian oil exports on April 13, per CENTCOM statements, in response to those moves. Some reports, including from Al Jazeera, described a full Iranian "block" of the strait. Others, including Reuters on April 27 and live vessel data, indicated traffic has slowed but not stopped entirely for non-Iranian commercial ships. Those differences could not be independently reconciled from the available shipping logs.

United Nations Secretary-General Antonio Guterres warned Thursday that prolonged closure past mid-year would cut global growth, lift inflation and push tens of millions more people into poverty and hunger. "The longer this vital artery is choked, the harder it will be to reverse the damage," he said in New York. A White House official said President Trump directed U.S. oil companies to prepare for a months-long disruption. The discussion, described by the official, focused on minimizing consumer impacts while sustaining pressure on Iranian exports.

The conflict's timeline stretches back before the February 28 U.S. and Israeli strikes. The International Atomic Energy Agency found Iran in breach of non-proliferation obligations in June 2025. Israel struck nuclear sites the following day. Iran terminated the JCPOA in October 2025. These steps, documented by the IAEA and World Nuclear Association, preceded the latest escalation but received limited attention in daily market coverage. Iranian officials, including Foreign Ministry spokesperson Esmaeil Baghaei, told IRNA on Thursday that quick results from mediation should not be expected. Tehran has threatened retaliation against U.S. assets in Gulf states if attacks resume.

U.S. officials face a separate deadline at home. Under the 1973 War Powers Resolution, the president must withdraw forces within 60 days of notifying Congress unless lawmakers approve continued action. Trump notified Congress on March 2 after strikes began. The administration told reporters, including those at MSNow and Axios, that the April 7 ceasefire "terminated" hostilities, pausing the clock. Defense Secretary Pete Hegseth made a similar argument in congressional testimony. Senators Tim Kaine and Elizabeth Warren countered that the deadline still applies and congressional approval is required. Those rebuttals appeared in CBS and Iran International reporting but were not uniformly included across outlets.

Corporate results underscored the chaos. Exxon Mobil reported first-quarter net income of $4.2 billion, down 45 percent from a year earlier, according to its filing. The company took a $4 billion paper hit on financial hedges due to "timing effects" from disrupted shipments, plus a $700 million loss on closed positions. Adjusted earnings beat Wall Street estimates at $1.16 per share. Chevron's profit fell 36 percent to $2.2 billion. It recorded a $2.9 billion hedge charge. Adjusted earnings of $1.41 per share also topped forecasts. Chevron CEO Mike Wirth told CNBC the global energy system remains under "extreme stress" and prices will stay elevated until the strait reopens. Both companies saw refining margins swing wildly. Exxon's U.S. refining swung to a $2.8 billion profit excluding hedge noise. Chevron's international refining posted a $1 billion loss.

Global supply chains felt secondary effects. Gulf smelters and Asian semiconductor plants reported feedstock shortages for chemicals and refined minerals that normally move through or near the strait. China dominates processing of copper, gallium and rare earths. Those vulnerabilities, tracked by the U.S. Geological Survey and industry analysts, existed before the current crisis but have been magnified. No independent sources confirmed claims in one op-ed that Iranian officials are "begging" Washington to reopen the strait or that the waterway is completely closed.

Talks continue under Omani and Pakistani mediation. Iran demands lifting of the port blockade before it eases its own restrictions. The Trump administration has said it will maintain the blockade until Tehran accepts a new nuclear framework. A senior Iranian Revolutionary Guards official warned of "long and painful strikes" on U.S. positions if attacks resume, according to Iranian media cited by Reuters. The U.S. Central Command has drawn up contingency plans for renewed strikes, Axios reported. Oil prices remain volatile. One trading session saw Brent swing from four-year highs back toward $114 before the contract rolled. Gasoline prices in the United States climbed to an average $4.23-$4.39 per gallon, up 34 cents week-over-week according to AAA data, though that figure appeared in only some coverage.

The longer the impasse lasts, the greater the risk that temporary hedge losses turn into sustained production cuts and higher structural costs for consumers everywhere.