WASHINGTON: U.S. crude oil jumped 8.7% to $104.95 a barrel and Brent crude rose 7.4% to $102.23 in Asian trading on Monday, sending both benchmarks back above $100 after the United States said it would begin a blockade of Iranian ports. The move followed the collapse of weekend talks in Islamabad aimed at preserving a ceasefire between Washington and Tehran, and it pushed energy markets sharply higher as traders reacted to tighter restrictions on Gulf shipping.
U.S. Central Command said the blockade would take effect at 10 a.m. Eastern time on Monday and would apply to vessels of any nation entering or leaving Iranian ports and coastal areas on the Arabian Gulf and Gulf of Oman. The military said the operation would not impede ships transiting the Strait of Hormuz to and from non-Iranian ports. The announcement narrowed an earlier threat of a broader closure but still marked a significant tightening of maritime restrictions around Iran.
The market reaction reflected the importance of the Strait of Hormuz to global energy supplies. U.S. Energy Information Administration data show oil flows through the waterway averaged 20.9 million barrels a day in the first half of 2025, equal to about one fifth of global petroleum liquids consumption and roughly one quarter of seaborne oil trade. Crude had fallen below $95 a barrel late last week after a temporary ceasefire, but Monday’s surge reversed that move and restored a triple digit oil price.
Blockade lifts crude back above $100
The oil spike rippled quickly across other assets. Asian equities fell at the start of the week, with Japan’s Nikkei 225 down 1.0%, South Korea’s Kospi off 1.1% and Hong Kong’s Hang Seng nearly 1.5% lower. U.S. stock futures and European futures also weakened, while the dollar strengthened against several major currencies. In India, the rupee fell 0.7%, the Nifty 50 dropped nearly 2%, and the benchmark 10-year government bond yield rose by more than six basis points.
Shipping patterns also showed the immediate impact of the U.S. order. Tankers steered clear of the Strait of Hormuz ahead of the start time, while some vessels that had entered the Gulf over the weekend did so before enforcement began. One very large crude carrier reversed course rather than continue toward the waterway, according to shipping data. Post-ceasefire traffic had resumed only partially, with just over 40 ships crossing the strait, well below normal levels for one of the world’s most important energy chokepoints.
Regional markets absorb the shock
The renewed price jump came even as Saudi Arabia said it had restored full pumping capacity through its East-West pipeline to about 7 million barrels a day, offering an alternative export route outside Hormuz. That additional capacity did not prevent a broad market selloff in Gulf equities, with Dubai’s main index falling 1.8% and Abu Dhabi’s benchmark down 1.0% on Monday. The rebound in crude also revived concerns about higher fuel costs for import-dependent economies and transport-heavy industries.
Monday’s move underscored how quickly oil markets can reset around disruptions in the Gulf, even after a brief pause in fighting had driven prices lower only days earlier. By early trading, Brent was more than 40% above levels seen before the latest collapse in diplomacy, and U.S. crude had also returned to highs reached during the conflict-driven supply shock. With the blockade set to begin later Monday, energy markets were again focused on shipping access, export flows and the stability of one of the world’s busiest oil corridors. – By Content Syndication Services.