The Strait of Hormuz blockade causes a 7% surge in international oil prices, with volatility continuing amid negotiation expectations.

Global oil prices surged nearly 7% on the 20th(Eastern Time in the United States) due to escalating maritime transportation unrest in the Middle East. As the Strait of Hormuz, a critical passage for global crude oil transportation, was once again blocked, the market immediately reflected the possibility of disrupted oil supplies in the prices.

On that day, the West Texas Intermediate (WTI) crude oil for delivery in May on the New York Mercantile Exchange( rose by $5.76)6.87%( compared to the previous trading day, closing at $89.61 per barrel. During the session, it briefly broke through $91, with the increase expanding to 8.77%. The Strait of Hormuz is a representative gateway for Middle Eastern oil exports to the global market; any signs of military tension or blockade in the region tend to cause sensitive reactions in international oil prices.

The direct background for the price surge was Iran’s re-imposition of blockade measures. The Iranian Islamic Revolutionary Guard Corps Navy began re-blocking the Strait of Hormuz on the 18th. This move was interpreted as a countermeasure against the ongoing U.S. sanctions blocking Iranian ships. The market believes this effectively means the strait is under near “dual blockade” pressure from both sides. When transportation is hindered, crude oil often causes greater short-term shocks than production disruptions, and similar concerns also pushed up oil prices this time.

However, oil prices did not rise unilaterally throughout the day. As expectations of a possible resumption of negotiations between the U.S. and Iran increased, WTI prices were temporarily pushed down to $87.02 during trading. U.S. President Donald Trump denied the possibility of negotiations breaking down during an interview with the New York Post and stated plans to push forward with negotiations. He also explained that the U.S. negotiating team was heading to Islamabad, the capital of Pakistan. The New York Times reported that Iran’s negotiating delegation also plans to go to Islamabad before the 21st, and both the Associated Press and Reuters reported that Iran is considering or intends to participate in a second round of talks with the U.S.

The issue is that the actual positions of both sides still differ significantly. Iranian Foreign Ministry spokesperson Saeed Khatibzadeh said on the same day that there are currently no plans or decisions for the next round of negotiations, and the semi-official Tasnim News Agency also reported that the policy of not participating in negotiations remains unchanged. Especially, Iran insists that the U.S. must first lift the blockade on the strait. Market experts believe that even if negotiations restart, restoring supply to normal may take time. Nicos Chabiras, an analyst at commodity broker Tradou, predicted that instability in the strait could further push up oil prices, and even if the situation eases, prices are unlikely to quickly return to pre-crisis levels. Frank Monkan of Buffalo Bayou Commodities also commented that the gap between the two sides remains large. This trend indicates that future fluctuations in international oil prices are likely to continue being significantly influenced by the progress of negotiations and the speed of maritime blockade relief.