Oil prices rebounded Thursday morning, with Brent crude (BZ=F) trading back above $100 after the White House said it was awaiting a response from Iran to move forward with potential second-round peace talks. These talks were initially planned for last weekend.
Futures on Brent crude, the international benchmark, and US benchmark West Texas Intermediate (WTI) crude (CL=F) both rose roughly 1.3% to trade above $103 per barrel and $94 per barrel, respectively.
Since Tuesday, the US and Iran have settled into a near stalemate over the Strait of Hormuz. On Tuesday night, President Trump said he was unilaterally extending the war’s two-week ceasefire indefinitely at the request of Pakistan. Tehran has said it will not negotiate while a US naval blockade of the strait, the world’s most critical waterway for energy flows, remains in place.
The US also canceled travel by Vice President JD Vance, special envoy Steve Witkoff, and the president’s son-in-law Jared Kushner to Islamabad on Tuesday.
In the strait, traffic has essentially stalled. The president said Thursday morning in a pair of Truth Social posts that he had ordered the US Navy to conduct minesweeping operations throughout the waterway, and that the military had received orders to shoot and destroy any ships seen placing mines in the water.
“We have total control over the Strait of Hormuz. No ship can enter or leave without the approval of the United States Navy,” the president wrote. “It is ‘Sealed up Tight,’ until such time as Iran is able to make a DEAL!!!”
Overnight on Wednesday, the US military boarded an oil tanker carrying Iranian oil as the vessel sailed through the Indian Ocean, the military said on X, demonstrating the range of which the US sees its mission against Iran. The move by the US military comes after similar interceptions of two other crude tankers that had tested the US blockade, and that the US accused of moving Iranian oil.
In posts to social media, Trump has claimed the Iranian regime is losing $500 million per day. White House press secretary Karoline Leavitt said the dollar figure is the “crux” of the naval blockade, and that the US is “strangling their main source of revenue.”
Yet, even as the US Navy has blocked, boarded, and seized a number of vessels in the Strait of Hormuz in recent days, ships have continued to slip by, according to intelligence firm Vortexa. As of Wednesday, more than 30 vessels with links to Iran had successfully crossed the blockade, Vortexa analysis showed.
Iranian ships have also fired on several vessels in the strait, provoking backlash from the US and other nations. In comments on X, Iranian President Masoud Pezeshkian said Iran “welcomed dialogue and agreement,” but that “breach of commitments, blockade and threats are main obstacles to genuine negotiations.”
The world has now lost roughly 500 million barrels’ worth of oil throughout the war, Claudio Galimberti, Rystad Energy’s chief US economist, told Yahoo Finance on Tuesday. Russell Hardy, the CEO of major commodities trading firm Vitol, said in comments at a conference this week that the world faces a guaranteed supply loss of roughly 1 billion barrels of oil.
On land, global visible oil stocks have declined by roughly 225 million barrels since the start of the war. Countries, including the US, have tapped into their reserves to ensure supply and stabilize prices, according to Goldman Sachs data. Reserve inventories are likely to hit their lowest levels on record even if the Strait of Hormuz reopens by the end of this month, the bank said.
