Oil Holds Near Highs as Trump Issues Ultimatum Over Strait of Hormuz

Oil prices traded in volatile fashion on Monday, hovering near recent peaks as geopolitical tensions escalated sharply following a 48-hour ultimatum from U.S. President Donald Trump to Iran to reopen the Strait of Hormuz.

By 00:26 ET (04:26 GMT):

• Brent crude rose 0.6% to $112.91 per barrel
• WTI crude gained 0.8% to $99.05 per barrel

Trump ultimatum escalates tensions

Over the weekend, Trump warned that Iran must reopen the Strait of Hormuz within 48 hours, or face severe military action targeting its critical energy infrastructure.

Tehran responded with defiance, signaling it could fully shut the strait and expand attacks on energy and water facilities across neighboring Gulf states. Reports also indicated renewed missile strikes on Israel early Monday.

The ultimatum marked a sharp escalation, especially after earlier signals from Washington suggesting a possible de-escalation of the conflict.

Hormuz disruption keeps oil elevated

Iran has effectively blocked the Strait of Hormuz since the start of the conflict in late February. The waterway is one of the most critical global energy chokepoints, handling roughly 20% of global oil consumption.

The disruption has already triggered a major supply shock:

• Oil prices surged close to $120 per barrel earlier in March
• Flows through the strait are estimated to be running at just ~5% of normal levels

Even with temporary measures—such as a 30-day U.S. waiver allowing purchases of Iranian oil already at sea—markets remain on edge over prolonged supply constraints.

IEA warns of historic-scale crisis

International Energy Agency (IEA) head Fatih Birol warned that the current crisis could surpass the severity of the 1973 and 1979 oil shocks, highlighting the scale of disruption facing global energy markets.

Goldman Sachs raises oil outlook

Reflecting growing structural risks, Goldman Sachs raised its oil price forecasts for the second time in two weeks:

• Brent forecast (March–April): $110/barrel (up from $98)
• 2026 Brent forecast: $85/barrel (previously $77)
• 2026 WTI forecast: $79/barrel (previously $72)

The bank expects:

• A six-week period of severely reduced flows through Hormuz
• Followed by a gradual recovery over one month
• Continued pricing of a significant geopolitical risk premium

Outlook

With supply disruptions persisting, military threats escalating, and no clear diplomatic resolution in sight, oil markets are likely to remain highly volatile.

The next 48 hours—given the U.S. ultimatum—could prove decisive, potentially determining whether the market faces a temporary shock or a prolonged energy crisis with global economic consequences.