Oil price tops $100 a barrel after Trump orders Hormuz blockade

Oil prices climbed sharply after US President Donald Trump announced a naval blockade of the Strait of Hormuz, pushing benchmark crude back above the $100-a-barrel mark. The move prompted investors to reprice geopolitical risk and the possibility of sustained supply disruptions.

The development unfolded rapidly: Trump announced the blockade following the collapse of US‑Iran peace talks in Pakistan, and US naval authorities outlined steps to interdict ships entering or leaving the strait. Iran’s forces responded by saying the waterway remained under their control and warned of forceful responses to military vessels, deepening regional tension. Media coverage and official statements accelerated market reactions.

Markets reacted with immediate volatility. US crude (WTI) and Brent futures both registered significant intraday gains, with some reports noting WTI trading around the mid‑$100s and Brent at similar levels on open. European airline shares fell in early trading—owners and carriers such as IAG, Wizz Air and easyJet reported notable declines—reflecting concern about jet fuel costs and weaker travel demand amid heightened geopolitical risk. Investors shifted toward safe havens while trimming exposure to travel and discretionary sectors.

The blockade must be seen in the broader energy security context: the Strait of Hormuz is a major artery for global oil shipments and sustained disruption would materially tighten global supply. International agencies and market analysts had warned that closures or prolonged interference could lift Brent prices significantly and add to inflationary pressures globally; strategic reserve releases can mitigate but not immediately offset logistical and insurance constraints.

Analysts say the near‑term outlook depends on the duration of restrictions, responses from producers and any coordinated releases from strategic reserves. Some banks have modelled scenarios where prolonged blockage could push Brent materially higher, while shorter disruptions or diplomatic breakthroughs would reduce the upside. Key indicators to watch are tanker traffic and port access reports, OPEC+ production moves and official diplomatic developments.