WTI crude oil has continued its sharp rally, gaining nearly $20 over just four trading sessions to surpass $105 per barrel, showing no signs of slowing down. In response, Iran has taken a firm stance, with its Foreign Ministry stating on Monday that no negotiations with the United States have taken place during the 31 days of conflict, contradicting claims by former U.S. President Donald Trump of significant progress in talks.
Egyptian President Abdel Fattah al-Sisi urged Trump to intervene and halt the Iran conflict, warning that market fears of oil prices soaring above $200 per barrel are not exaggerated.
In an attempt to influence market sentiment, Trump issued a social media statement late Monday, suggesting that the U.S. is engaged in serious negotiations with a "new, more rational regime" in Iran to end military operations. He claimed substantial progress but warned that if an agreement is not reached soon and the Strait of Hormuz is not reopened, the U.S. would destroy Iran’s power facilities, oil wells, and Kharg Island—possibly including desalination plants—as retaliation for what he described as 47 years of "terrorist rule."
The statement was perceived as an ultimatum, although Trump had previously extended deadlines without receiving a response from Iran. Investors remain cautious, with some bullish traders adopting a wait-and-see approach amid the uncertainty.
U.S. Treasury Secretary Janet Yellen noted that the oil market is facing a supply shortfall of 10 to 12 million barrels per day, while Secretary of State Antony Blinken emphasized that the U.S. will not allow Iran to permanently control the Strait of Hormuz or establish a toll system. He stated that diplomatic efforts are ongoing but that the U.S. is prepared if negotiations fail.
In defiance, Iran’s National Security Committee approved a bill on March 30 to impose tolls on vessels passing through the Strait of Hormuz. The proposed measures include banning ships from the U.S. and Israel, prohibiting vessels from countries that have imposed unilateral sanctions on Iran, and requiring payment in Iranian rials. Iran plans to collaborate with Oman to establish a legal framework. Following the announcement, oil prices surged in after-hours trading.
The escalating tensions increase the likelihood of ground military engagement, which would place immense pressure on oil markets. With WTI crude already pricing in heightened geopolitical risks, traders are advised to exercise caution and strengthen risk management during this volatile period.
Daily Market Movements: WTI crude futures rose by $3.24, or 3.25%, to settle at $102.88 per barrel. Brent crude gained $2.07, or 1.97%, closing at $107.39 per barrel. INE crude futures edged down 0.41% to 759.9 yuan.
The U.S. dollar index increased by 0.33% to 100.51, while the USD/CNY exchange rate rose 0.04% to 6.8813. The 10-year U.S. Treasury yield climbed 0.53% to 110.77, and the Dow Jones Industrial Average advanced 0.11% to 45,216.14.
Recent Developments: According to Kpler, crude shipments through the Bab el-Mandeb Strait reached their highest level since 2023 in March, totaling 4.14 million barrels per day, up from 2.95 million in February. The increase is partly due to rerouted Middle Eastern oil avoiding the Strait of Hormuz.
Amid the turmoil, Saudi Aramco’s official selling price for Arab Light crude is expected to surge to a record premium of around $40 per barrel for May-loading cargoes, compared with just $2.50 in April. Asian refiners are reportedly seeking alternative pricing benchmarks, such as Brent or Shanghai futures, to mitigate costs.
In response to Iran’s proposed tolls, Trump warned that the U.S. could act "within two minutes" to prevent such measures, emphasizing coordination with regional allies like Saudi Arabia, Qatar, the UAE, and Bahrain. The White House has stated it does not support Iran’s plan to charge transit fees.