International benchmark Brent crude futures for May delivery rose 1% to $113.32 per barrel on Monday, reversing initial declines. U.S. West Texas Intermediate (WTI) crude was up around 2.8% at $101.01 a barrel during early European hours. The spread between Brent and WTI exceeded $14 a barrel, marking the steepest price difference between the two benchmarks in years.<\/p>\n
Price moves followed President Donald Trump\u2019s ultimatum demanding that Iran fully reopen the Strait of Hormuz within 48 hours or face strikes on its energy infrastructure. Trump threatened on Saturday to \u201cobliterate\u201d Tehran\u2019s power plants if the strait was not reopened, with the deadline set to expire on Monday in Washington.<\/p>\n
Iran responded through Parliament spokesperson Mohammad Baqer Qalibaf, who said that critical infrastructure and energy facilities in the Gulf region could be \u201cirreversibly destroyed\u201d if Iranian power plants were attacked. Iran has effectively closed the Strait of Hormuz to most shipping traffic since U.S.-Israel strikes on the country on Feb. 28, leaving the waterway, which normally handles roughly 20% of global oil supplies, largely blocked to commercial shipping.<\/p>\n
Goldman Sachs on Monday sharply raised its oil price forecasts, projecting Brent will average $110 in March and April, up from a previous forecast of $98. The bank also increased its estimates for WTI to $98 in March and $105 in April. Goldman analysts stated that, \u201cassuming that Hormuz flows remain at 5% [of normal flows] through April 10, prices are likely to trend higher over that period.\u201d The bank added that if flows through Hormuz remain at 5% for 10 weeks, daily Brent prices would likely exceed their 2008 record level, when Brent crude reached about $147 per barrel in July before collapsing to around $40 within months as the global financial crisis weakened demand.<\/p>\n
The International Energy Agency\u2019s executive director Fatih Birol described the situation in the Middle East as \u201cvery severe\u201d and worse than the two oil shocks of the 1970s and the combined impact of the Russia-Ukraine war on gas. IEA member nations agreed on March 11 to release a record 400 million barrels of oil from strategic stockpiles to address supply disruptions linked to the Iran war.<\/p>\n
The recent price surge has heightened inflation concerns and added pressure on global growth prospects as markets absorb the potential implications of a prolonged disruption in one of the world\u2019s most important oil transit routes.<\/p>\n
What are the latest Brent and WTI price levels mentioned?<\/strong> How much has Goldman Sachs raised its oil price forecasts?<\/strong> Why is the Strait of Hormuz significant for oil markets?<\/strong> What action has the IEA taken in response to the disruption?<\/strong>
Brent crude futures for May delivery rose 1% to $113.32 per barrel, while U.S. WTI crude traded around $101.01 per barrel, up about 2.8% during early European hours.<\/p>\n
Goldman Sachs now expects Brent to average $110 in March and April, up from a previous forecast of $98, and has raised its WTI projections to $98 in March and $105 in April.<\/p>\n
The Strait of Hormuz normally handles roughly 20% of global oil supplies, so its effective closure to most commercial shipping has intensified concerns about supply disruption and upward pressure on prices.<\/p>\n
IEA member nations agreed on March 11 to release a record 400 million barrels of oil from strategic stockpiles to mitigate the supply disruption triggered by the Iran war.<\/p>\n