On Friday, oil prices increased as U.S. President Donald Trump‘s decision to provide Iran with a 10-day extension for accessing the crucial Strait of Hormuz did not alleviate supply worries.
International benchmark Brent crude futures for May delivery increased by 1.8% to $109.93 a barrel, correcting some gains after briefly surpassing $110, while U.S. West Texas Intermediate futures for May delivery rose 1.6% to $96.01.
In a social media post on Thursday, Trump indicated that negotiations with Iran were “progressing very well” despite “incorrect reports to the opposite by the Fake News Media, and others.”
As part of the announcement, the U.S. leader mentioned he would halt strikes on Iran’s energy infrastructure until April 6. Iran has yet to respond to Trump’s recent comments.
During a Cabinet meeting on Thursday, Trump also stated that Iran had permitted 10 oil tankers to transit the Strait of Hormuz this week as a “gesture” to the U.S.
“They said, ‘To demonstrate that we’re genuine and steadfast and present, we’re going to allow you to have eight oil vessels … and they’ll depart tomorrow,'” Trump recounted, referring to Iran.
He noted that the shipment eventually grew larger. “They then retracted a statement they made, and they said, ‘We’re going to dispatch two more vessels.’ And it ultimately became 10 vessels,” he added.
Markets are closely observing developments in the Strait of Hormuz for indications of disruption or de-escalation, as the tensions between Washington and Tehran continue to contribute to fluctuations in energy prices. The strait serves as a crucial conduit for global crude oil transportation.
Trump’s comments imply that at least some oil shipments are still transiting through the waterway, possibly alleviating immediate supply issues.
However, analysts warned that the overall oil market remains increasingly precarious, even if isolated shipments resume.
“The oil market did not underestimate the disruption in the Strait of Hormuz; it absorbed it,” remarked Paola Rodriguez-Masiu, chief oil analyst at Rystad Energy.
“For nearly four weeks, markets have demonstrated notable resilience … bolstered by a combination of pre-war surplus, crude-on-water, and policy barrels that provided a short-term buffer and kept prices stable. That phase is now coming to an end,” she stated.
According to Rystad, the global system has transitioned from “buffered to fragile” following weeks of supply shortages and inventory reductions, leaving minimal capacity to accommodate further shocks.
Approximately 17.8 million barrels per day of oil and fuel flows through the Strait of Hormuz have been interrupted, the firm estimated, with nearly 500 million barrels of total liquids lost thus far.
