The blockade in the Hormuz Strait pushes oil prices soaring, Brent oil prices surged over 70% in Q1, the largest quarterly increase in 36 years.

In the context of the ongoing war between the US and Iran for over a month, and disruptions in transportation through the Strait of Hormuz, global oil prices have soared significantly to reach a temporary high, leading to escalating tensions in the energy market. In the past month, the US has carried out over 11,000 strikes against Iran, and the vital shipping route of the Strait of Hormuz remains restricted, driving up international oil prices sharply in March. Data shows that the international crude oil benchmark, Brent crude oil futures price, has risen by about 43% in March, reaching $103.97 per barrel, marking the largest monthly increase since May 2020; with a cumulative increase of 71% for the first quarter, the largest quarterly increase since 1990. As for the US benchmark oil prices, West Texas Intermediate (WTI) rose by 51% in March, with a cumulative increase of 77% in the first quarter of 2026, also marking the largest increase since the early stages of the pandemic in 2020. The global economic shutdown in that year caused drastic fluctuations in supply and demand, while sanctions imposed due to the Russia-Ukraine conflict in the summer of 2022 also drove oil prices significantly higher. In terms of diplomacy, Iran has denied engaging in formal negotiations with the US. Iranian Foreign Minister Araghchi stated that while there has been communication between the two sides, it has not entered the stage of formal talks; the Iranian Foreign Ministry spokesperson also emphasized that there have been "no talks with the US in the past 31 days". However, there are reports that intermediaries, including Pakistan, have submitted proposals and pushed for dialogue. On the military front, US Secretary of Defense Hegseth stated that the coming days will be a critical juncture, as Iran still has the capability to launch missiles and drones, but the frequency of recent attacks has decreased. The rise in energy prices has quickly translated into higher costs for end consumers. Data shows that the average price of gas in the US has risen to $4.02 per gallon, an increase of over $1 from February, reaching its highest level since the summer of 2022, further exacerbating the cost of living for the public. Despite repeated reports in the market that the conflict may be nearing an end, many world leaders, including Trump, have not provided a clear timeline. Trump criticized allies like the UK for not participating in actions against Iran, and stated that countries should either buy oil from the US or go to the Strait of Hormuz to "get resources on their own". Meanwhile, the EU is attempting to de-escalate the situation. European Council President Antonio Costa stated that he had communicated with the Iranian president about easing tensions, indicating that diplomatic efforts are still ongoing. The market generally believes that the navigational condition of the Strait of Hormuz remains a key variable in determining the direction of oil prices. The Iranian parliament has approved a plan to charge tolls for ships passing through the waterway, and even if the war ends, this measure could keep oil prices high. Data shows that before the war, about 20% of global oil and natural gas transportation needed to pass through the Strait of Hormuz, with the majority heading to Asian refineries. Currently, some Asian countries have implemented energy-saving measures to cope with supply pressures, including shortening workweeks and limiting energy use.