Global oil markets lurched Thursday as Brent crude touched $126 per barrel—its highest level since 2022—before settling back near $108, as traders grapple with a prolonged closure of the Strait of Hormuz and dimming prospects for a diplomatic resolution to the U.S.-Iran conflict.
The overnight spike reflects deepening anxiety over the dual blockades imposed by Washington and Tehran in the narrow waterway, a chokepoint that normally carries about one-fifth of the world's daily oil supply. Only a handful of vessels have transited the strait in the past two months, fueling fears of sustained supply disruptions and inflationary pressure across global energy markets.
Markets jolted Wednesday after Axios reported that President Trump was scheduled to receive a briefing on plans for a potential resumption of U.S. military operations in Iran. Citing multiple sources, the outlet said U.S. Central Command has prepared a strategy for a “short and powerful” wave of strikes aimed at forcing Tehran to negotiate. Iranian officials have so far refused to commit to another round of face-to-face talks in Pakistan, casting doubt on any swift end to hostilities.
Trump, meanwhile, has ordered the U.S. Navy to maintain its blockade in the strait, which he described as “genius” and “100 percent foolproof” during a Wednesday Oval Office appearance. “We’ve got an amazing military. Now they have to cry uncle. That’s all they have to do. Just say, ‘we give up,’” the president said.
The strait has become Iran’s primary bargaining chip, with its leaders seeking to inflict enough economic pain to extract concessions from Washington. Tehran has reportedly offered to ease its grip on the waterway in exchange for the U.S. lifting its blockade, but wants to postpone discussions about its nuclear program. Secretary of State Marco Rubio and Trump have dismissed that proposal as a nonstarter, even as rising energy prices squeeze American households.
The national average for a gallon of regular gas stood at $4.30 on Thursday, according to AAA. Prices topped $5 in Hawaii, Nevada, Oregon, and Washington, while California drivers faced nearly $6 per gallon. In the Great Lakes region, Patrick De Haan, head of petroleum analysis at GasBuddy, noted that gas prices in Michigan, Indiana, Ohio, Illinois, and Wisconsin have reached their highest levels since summer 2022 and are nearing all-time records. Great Lakes gas prices have surged past $4 as refinery woes compound the crisis.
The White House is under mounting pressure to stabilize energy markets. Trump recently met with oil executives to weigh extending the Iran blockade even as gas prices hit $4.23. Some analysts worry that a prolonged closure of the strait could trigger a broader economic downturn, particularly if diplomatic channels remain blocked. Trump has warned Iran to “get smart” as nuclear talks stall and gas prices surge.
With no breakthrough in sight, the standoff over the Strait of Hormuz continues to roil global oil markets, testing the resilience of both the U.S. economy and the administration’s strategy of maximum pressure.
