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

Oil prices climbed again Friday as the fragile ceasefire between the United States and Iran showed little sign of resolving the underlying conflict, with Tehran maintaining its blockade of the Strait of Hormuz and Washington continuing to enforce a naval stranglehold on Iranian ports. Brent crude futures rose 0.9 percent to $111.34 a barrel in early trading, while West Texas Intermediate held near $105. The June Brent contract had spiked to $126.41 a day earlier before expiring, levels not seen since the 2022 energy crisis and a sharp jump from the $65 range that prevailed before U.S. and Israeli strikes began on February 28.

The war, now in its third month, has produced the largest oil supply disruption in history. One-fifth of global oil and liquefied natural gas shipments normally pass through the narrow Strait of Hormuz. Its effective closure has rippled through every corner of the energy market. Gulf smelters have gone silent. Asian semiconductor plants are scrambling for alternative feedstocks that do not exist. Even the companies best positioned to profit from high prices are suffering. Exxon Mobil and Chevron both reported sharp profit declines for the first quarter, with Exxon’s net income falling 45 percent and Chevron’s dropping 36 percent. Exxon alone lost nearly $4 billion on hedging contracts that became liabilities when the sudden supply shock upended timing and pricing assumptions. Chevron CEO Mike Wirth told CNBC the global energy system remains under “extreme stress” and warned that prices will stay elevated until the strait reopens.

The economic pain is not limited to oil. The Washington Examiner noted that sulfuric acid, aluminum feedstock, industrial chemicals, and refined minerals also move through or around the same chokepoint. China’s dominance over processing of copper, gallium, germanium, and rare earth magnets has turned a regional military crisis into a global supply-chain emergency. The vulnerability has drawn attention from unlikely quarters. Amazon founder Jeff Bezos is reportedly raising $100 billion through Project Prometheus to acquire American manufacturers whose production depends on these inputs. The implication is clear: decades of offshoring critical refining capacity to China, combined with reliance on a single Middle Eastern waterway, has left U.S. industry dangerously exposed.

Politically, the Trump administration is using the April 7 ceasefire to sidestep congressional oversight. Under the 1973 War Powers Resolution, the president must withdraw troops within 60 days unless Congress authorizes continued action. With no such authorization granted, the White House now claims that the absence of direct fire since the Pakistan-brokered truce “terminated” hostilities. Defense Secretary Pete Hegseth made the argument before the House Armed Services Committee, and an administration official repeated it to reporters. Critics see legal gymnastics designed to avoid accountability for a war that began without clear congressional approval and has already destabilized energy markets worldwide.

Iranian officials have shown no urgency to concede. Foreign Ministry spokesperson Esmaeil Baghaei told state media that expecting rapid results from mediation, regardless of who is involved, is unrealistic. Tehran has threatened retaliation against U.S. assets in neighboring Gulf states if attacks resume. The United Arab Emirates, meanwhile, signaled deep distrust of Iranian assurances on freedom of navigation, with presidential adviser Anwar Gargash stating that no unilateral Iranian arrangements can be trusted after what he called “treacherous aggression” against its neighbors.

The human and strategic costs remain largely invisible in market commentary but are implicit in every delayed tanker and every idled refinery. A conflict sold as limited and necessary has instead produced the very chaos its architects presumably sought to avoid: higher prices for consumers, squeezed corporate margins even for oil majors, and a glaring demonstration that American technological ambition, whether in artificial intelligence or defense manufacturing, still rests on fragile foreign supply lines.

Analysts warn that without a genuine diplomatic breakthrough the current truce will simply become a pause between rounds. Oil markets are pricing in prolonged uncertainty. The broader industrial base, from electric vehicles to semiconductors, faces sustained pressure. And the White House’s creative interpretation of the War Powers Resolution raises fresh questions about how far any administration can stretch the definition of “terminated hostilities” while aircraft carriers remain positioned and sanctions bite.

The Strait of Hormuz has once again reminded the world that geography still dictates power. Until the waterway flows freely and the underlying grievances are addressed, the economic fallout will continue to spread far beyond the Persian Gulf, exacting a price that ordinary consumers and vulnerable supply chains will ultimately pay.