-- EMEA crude futures rallied in after-hours trading on Monday after President Trump ordered a naval blockade of the Strait of Hormuz following the collapse of US-Iran peace talks, while Tehran threatened to strike Arabian Gulf ports in retaliation.
Brent crude futures jumped 5% to $99.98 per barrel, while Murban oil futures climbed 6.24% to $104.26/bbl.
Soojin Kim, a research analyst at MUFG, said energy prices spiked after the US-imposed Hormuz blockade, following failed peace negotiations in Islamabad.
The US Central Command began enforcing the Hormuz blockade at 10.00 ET on Monday, as Trump warned that any vessels attempting to breach the perimeter would be "immediately eliminated."
"The blockade will be enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman," US Central Command said in a social media post on X, adding that it will not impede freedom of navigation for vessels transiting the Hormuz to and from non-Iranian ports.
The latest data from MarineTraffic showed that two tankers reversed course near the strategic waterway shortly after the start of the US blockade, with one vessel signaling China as its destination.
On Monday, Trump threatened strikes against Iranian navy ships that approach the US blockade, saying the vessels "will be immediately eliminated, using the same system of kill that we use against the drug dealers on boats at Sea".
Erik Meyersson, chief EM Strategist at SEB Research, said that without progress on the diplomatic front, Hormuz will remain effectively closed, which would push oil prices higher.
However, despite the threat, three fuel tankers reportedly transited the Strait via routes close to Iran's coastline, marking the first such movements since the blockade was announced.
Trump, in a social media post, claimed that 34 vessels passed through the Hormuz on Sunday.
Meanwhile, Iran said it would target all ports in and close to the Arabian Gulf if its own shipping hubs are threatened, heightening the standoff over the strategic waterway and raising concerns over global energy supply disruptions.
Iran's armed forces said the US threat to block the Strait would be "an act of piracy," reiterating plans to permanently control the Hormuz after failed peace talks between the two nations.
"The disruption has reinforced concerns about supply, particularly across middle distillates. Tight availability continues to underpin diesel and jet fuel markets, with some European airports warning of potential shortages within three weeks if flows are not restored," Saxo Bank strategists said on Monday.
On the supply front, the Organization of the Petroleum Exporting Countries said crude production by DOC countries averaged 35.06 million barrels per day in March, down about 7.70 million b/d from February, when it averaged 42.72 million b/d.
The latest data from the producer group showed that global oil demand growth for 2026 is expected to be 1.4 million b/d, unchanged from its forecasts last month.