The US-Iran war has resulted in a physical chokepoint, taking offline part of the supply of oil and gas due to the closure of the Strait of Hormuz. In a dramatic turn of events, Brent crude futures slumped 14.43% to hit an intraday low of $96 per barrel, while WTI crude futures tanked 14.25% to reach an intraday low of $84.23 per barrel.

This plunge in crude oil prices follows President Donald Trump’s announcement to halt military strikes on Iranian power plants and energy infrastructure. Trump stated, “I am pleased to report that the United States of America and the country of Iran have had, over the last two days, very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East.” He further instructed the Department of War to postpone any military actions for five days, contingent on the success of ongoing discussions.

Despite this temporary reprieve, the situation remains precarious. The International Energy Agency (IEA) has assessed that the current episode represents the largest supply disruption in the history of the global oil market. Flows through the Strait of Hormuz, which handles about 20% of global oil and liquefied natural gas flows, have collapsed from 20 million barrels per day to a trickle.

Saudi Arabia has warned that if the conflict continues beyond April, oil prices could soar to $180 per barrel. Similarly, Qatar’s Energy Minister has cautioned that Brent could reach $150, reflecting the ongoing volatility in the region.

As the war has damaged major energy facilities in the Gulf, the longer the conflict persists and the disruption of free transit through the Strait continues, the longer oil and gas prices are expected to remain elevated. Observers are closely monitoring the situation, as Gulf production cuts of at least 10 million barrels per day are already in effect.

The US has been actively working to reopen the Strait of Hormuz for energy shipments, but uncertainties remain about the stability of the region. Details remain unconfirmed regarding the long-term implications of these developments on global oil markets.

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As the deadline looms, President Donald Trump has issued a stark ultimatum to Iran, demanding the reopening of the vital Strait of Hormuz within 48 hours. This waterway is crucial, with one-fifth of global oil and liquefied natural gas supplies passing through it. Trump’s threats come amid rising tensions between the two nations, with military action on the table.

On March 23, 2026, Trump ordered the U.S. military to postpone any strikes against Iranian power plants for five days, indicating a potential shift towards diplomacy. He stated, “We are very intent on making a deal with Iran,” suggesting that there might be room for negotiations despite the escalating rhetoric.

However, Iranian officials have firmly denied any talks with Washington, asserting that no negotiations are underway. An unnamed Iranian security official responded to Trump’s threats, stating, “There has been no negotiation and there is no negotiation, and with this kind of psychological warfare, neither the Strait of Hormuz will return to its pre-war conditions nor will there be peace in the energy markets.” This highlights the deep mistrust that characterizes U.S.-Iran relations.

Trump’s ultimatum aims to dismantle Tehran’s control over the Strait of Hormuz, a strategic chokepoint that has been a flashpoint in past conflicts. He has made it clear that Iran must relinquish its enriched uranium stockpile as part of any potential deal. The stakes are high, as Iran has threatened to shut down the Strait if the U.S. follows through on its military threats.

As the five-day period unfolds, the international community watches closely. Trump has indicated that if the halt in military strikes goes well, there could be a pathway to resolving the conflict. However, the response from Iran remains uncertain, and the potential for escalation is palpable.

Details remain unconfirmed regarding the exact nature of any discussions or the likelihood of a peaceful resolution. The situation is fluid, and the implications of these developments could have far-reaching consequences for both nations and the global energy market.

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Crude oil prices have crossed $100 a barrel amid the ongoing Iran war, with Brent crude surging to around $119 per barrel, marking the highest level since July 2022. This dramatic increase in prices is largely attributed to the effective closure of the Strait of Hormuz, a critical chokepoint for global oil transportation.

The Strait of Hormuz handles nearly 20 million barrels of oil per day, which constitutes roughly one-fifth of global oil production. In 2025, exports moving through the strait averaged 13.4 million barrels per day. The current geopolitical tensions have led to significant disruptions, with Iraq initiating its own production shut-ins last week due to the effective closure of this vital waterway.

As the conflict escalates, storage facilities in the region are rapidly reaching capacity, raising concerns about potential shortages. “Right now, the biggest fear is still disruption to flows through Hormuz,” said Haris Khurshid, highlighting the critical nature of this situation for global oil markets.

Historically, crude oil prices have been sensitive to geopolitical events. For instance, prices last climbed above $100 in February 2022, shortly after Russia’s invasion of Ukraine. The market also experienced significant fluctuations following the Arab Spring uprisings in March 2011, when Brent soared to $127. The last instance of negative correlation between crude prices and the Nifty 50 index occurred in 2022 when oil prices spiked beyond $100 per barrel.

In addition to the immediate impacts on oil prices, analysts are closely monitoring the broader economic implications. Andy Lipow noted, “The psychological level of $100 oil may just be a short-term price target on its way to higher levels as the conflict drags on.” This sentiment reflects concerns that prolonged instability could lead to even higher prices.

Market observers are also considering the potential ramifications for stock indices. ICICI Securities suggested that in such an environment, the Nifty 50 could potentially drop by approximately 10% from its pre-conflict level of 25,178, with the P/E ratio possibly declining to around 18 times.

Crude oil prices have historically fluctuated due to geopolitical tensions, such as the Iran war and Russia’s invasion of Ukraine. The last record high for Brent was $147.50 per barrel on July 11, 2008, while during the Covid pandemic, WTI slumped to minus $40.32 and Brent tanked to a record low of $15.98.

As the situation unfolds, details remain unconfirmed regarding the long-term impacts on oil supply and pricing. The global market remains on edge, awaiting further developments in the region.

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