Key Takeaways

• Prices steady near highs: Brent crude rose 0.2% to $111.51 per barrel, while WTI eased 0.3% to $99.63 — both still hovering near their strongest levels since late March after Tuesday’s 3%+ surge.
• Extended blockade ahead: A WSJ report says Trump has instructed aides to prepare for a prolonged blockade of Iran, intensifying efforts to choke off Tehran’s oil exports.
• Iran offer rejected: Trump turned down Tehran’s proposal to reopen the Strait of Hormuz, demanding tougher curbs on its nuclear program before any deal.
• UAE quits OPEC: The Emirates’ departure from the producer group becomes effective Friday — a major blow to OPEC during ongoing war-driven supply disruptions.
• UAE-Saudi rift: The exit puts Abu Dhabi at odds with neighbor Saudi Arabia, OPEC’s effective leader, with the UAE having long chafed against production quotas.
• Production hike on hold: While the UAE is expected to ramp up output, any increase is likely contingent on Hormuz reopening — a distant prospect.
• 20% of global supply blocked: The strait has been effectively closed since late February, fueling the prolonged surge in crude prices.

Oil prices steadied near a one-month high in choppy trading on Wednesday, as markets digested the implications of the United Arab Emirates’ decision to break away from the OPEC producer group alongside the ongoing supply disruptions across the Middle East.

Crude prices had briefly rallied more than 1% after a report indicated that U.S. President Donald Trump was bracing for an extended blockade of Iran — a move that could pave the way for prolonged disruptions in Middle Eastern oil shipments.

Brent crude futures rose 0.2% to $111.51 per barrel by 01:01 ET (05:01 GMT), while West Texas Intermediate crude futures slipped 0.3% to $99.63 per barrel.

Both benchmarks rocketed more than 3% higher on Tuesday and remained near their strongest levels since late March.

Trump Bracing for Prolonged Iran Blockade — WSJ

Trump has directed his aides to prepare for an extended blockade of Iran, the Wall Street Journal reported on Tuesday evening.

The president opted to ratchet up efforts to strangle Iran’s oil exports and pile additional pressure on Tehran to come to a deal, according to the report.

The WSJ also revealed that Trump rejected Iran’s proposal to reopen the Strait of Hormuz and bring the war to a close, with Washington insisting on tougher restrictions on Tehran’s nuclear program.

Iran has consistently denounced the U.S. blockade and has demanded its removal as a precondition for any peace negotiations. While Trump indefinitely extended a ceasefire with Iran last week, efforts to advance U.S.-Iran peace talks have largely collapsed.

A prolonged blockade against Iran is likely to herald further supply disruptions from the region, given that Tehran has pledged to keep Hormuz shut down in response to American aggression.

UAE Departs OPEC Amid War-Driven Turmoil

The UAE’s withdrawal from OPEC — set to take effect on Friday — represents a major blow to the oil producing group amid persistent disruptions linked to the Iran war.

The UAE said the move was aimed at focusing more closely on its “national interests.” Yet the decision sets the country on a collision course with neighbor Saudi Arabia, the effective leader of OPEC.

The Emirates is broadly expected to ramp up oil production, given that it has long objected to OPEC’s production quotas in the past.

However, with shipping through the Strait of Hormuz still blocked, any production boost is likely to materialize only after the channel reopens.

That scenario appeared distant, with Hormuz still shuttered and efforts to broker further U.S.-Iran talks largely falling apart.

Hormuz’s closure since late February has disrupted roughly 20% of the world’s oil supplies, igniting an extended surge in crude prices.