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

Oil prices rose again Friday as diplomatic efforts to end the Iran war remained stalled and restrictions on the Strait of Hormuz continued to throttle global energy flows. Brent crude futures for July gained nearly one percent to trade around $111.30 a barrel while West Texas Intermediate held near $105. The June Brent contract had spiked to $126.41 before expiring Thursday its highest level since 2022. Markets are now pricing in a prolonged disruption that began when the United States and Israel launched strikes on Iran on February 28.

A Pakistan-brokered ceasefire took effect on April 8 yet both sides show little sign of bridging their differences. Iranian Foreign Ministry spokesperson Esmaeil Baghaei told state media that quick breakthroughs were unrealistic regardless of the mediator. Tehran continues to block passage through the narrow strait that carries roughly one-fifth of the world’s oil and liquefied natural gas. In response the U.S. Navy has maintained a blockade of Iranian ports and crude exports. The United Arab Emirates warned Friday that Iran’s actions have undermined trust in any unilateral assurances about freedom of navigation.

The conflict’s economic footprint now extends far beyond gasoline prices. Exxon Mobil and Chevron both reported sharp drops in first-quarter profits on Friday. Exxon’s net income fell 45 percent from a year earlier while Chevron’s declined 36 percent. The results surprised analysts who expected higher crude prices to deliver windfalls. Instead the companies cited massive hedging losses and the sudden halt in shipments after the fighting began. Chevron chief executive Mike Wirth told CNBC the global energy system remains under extreme stress and warned that prices will stay elevated until the strait reopens.

Those stresses reach deeper into the industrial economy. The same waterway that carries oil also moves sulfuric acid aluminum feedstock and refined minerals essential to semiconductors and advanced manufacturing. Gulf smelters have gone silent. Chip plants in Taiwan and South Korea are scrambling for alternative supplies that do not exist in sufficient quantities. China still dominates processing of copper gallium germanium and rare-earth magnets. A single policy change in Beijing or further disruption near Hormuz can freeze assembly lines half a world away.

This vulnerability has drawn attention in Washington and corporate boardrooms. Amazon founder Jeff Bezos is raising roughly $100 billion through an initiative called Project Prometheus to acquire U.S. manufacturers that rely on these materials. The bet is that pairing artificial intelligence with domestic factories can rebuild industrial capacity. Yet the raw inputs for those factories still flow through contested waters or foreign refiners. The current crisis illustrates how military action in the Middle East can ripple through supply chains built on fragile assumptions about open sea lanes and stable great-power relations.

The Trump administration is meanwhile navigating domestic legal constraints. Under the 1973 War Powers Resolution the president must withdraw forces within 60 days of notifying Congress unless lawmakers approve continued action. No such authorization has passed. On Friday White House officials told reporters that the April ceasefire had effectively “terminated” hostilities meaning the clock had stopped. Defense Secretary Pete Hegseth advanced the same argument during congressional testimony. Critics view the interpretation as an attempt to sidestep legislative oversight of what has become a nearly two-month-old conflict with no clear end date.

The longer the impasse lasts the greater the risk to American consumers and workers already facing higher fuel and goods prices. Energy costs feed directly into inflation calculations that influence everything from grocery bills to interest rates set by the Federal Reserve. At the same time major oil companies are posting weaker results despite the price spike a reminder that geopolitical shocks can scramble corporate balance sheets in unpredictable ways.

Some analysts point to recycling as a partial answer. The United States already discards vast quantities of metals and minerals in landfills an “urban mine” that could reduce dependence on overseas refining if properly processed. Yet building the infrastructure to recover and refine those materials at scale would require years of investment in technology policy and local permitting far beyond the timeline of the current crisis.

For now the conflict grinds on with little public indication that either Washington or Tehran is prepared to make the concessions necessary for a lasting deal. Iranian officials have threatened retaliation against U.S. assets in Gulf countries should strikes resume. Oil markets continue to price in uncertainty. And the broader lesson of the past two months is that the world’s most advanced economies remain tethered to a narrow shipping lane half a globe away where ancient rivalries and modern weapons can halt the flow of both fuel and the invisible ingredients of the digital age. How policymakers respond to that exposure will shape economic resilience for years to come.