Strait of Hormuz Closure Pushes Oil Above $100 as Talks Stall

TL;DR: Oil prices surged past $100 per barrel after Iran closed the Strait of Hormuz, and stalled US‑Iran negotiations leave no clear path to relief.

The narrow waterway linking the Persian Gulf to the Gulf of Oman now blocks roughly one‑fifth of the world’s oil and gas exports. Iran’s closure follows a US‑Israel strike on February 28, prompting Tehran to choke the flow of energy to Asia and Europe.

WTI crude, the US benchmark, climbed to $100.09 per barrel, while Brent, the global reference, reached $111.85. Both levels dwarf pre‑attack prices of $67.02 and $72.87 recorded just days earlier. At the pump, U.S. gasoline hit $4.18 a gallon, the highest in nearly four years.

“Negotiations seem stalled … and any near‑term resolution seems difficult,” said Rachel Ziemba, adjunct senior fellow at the Center for a New American Security. She warned that even a resilient U.S. economy will feel a global price shock.

The price spike ripples through inflation metrics. The U.S. consumer price index rose 3.3 % year‑over‑year, the strongest pace since May 2024, driven largely by energy costs. Economists project that higher oil prices will lift core inflation for the next twelve months and could pressure wage‑setting behavior.

Globally, the disruption forces a downgrade of world GDP growth to 2.4 %, a 0.4‑point cut since March. Analysts expect Brent to average $113 this quarter before slipping below $80 by year‑end, assuming the strait reopens.

The United Arab Emirates announced its exit from OPEC and OPEC+ on May 1, seeking to raise output. The move offers little relief while Hormuz remains closed, as additional supply cannot reach markets.

What to watch next: whether diplomatic channels reopen enough to restore shipping through the Strait of Hormuz, and how quickly oil inventories adjust to the new price regime.