Oil prices surged Sunday as a US-Iran standoff over the Strait of Hormuz prevented tanker traffic, renewing fears about global energy supplies. U.S. crude oil increased 6.4% to $87.90 per barrel, while Brent crude climbed 5.8% to $95.64 per barrel, according to trading data from the Chicago Mercantile Exchange. The jump followed Iran’s reversal of a decision to reopen the critical waterway after President Donald Trump said a U.S. Navy blockade of Iranian ports would remain in effect.
The standoff has created one of the worst global energy crises in decades, with gasoline, diesel and jet fuel prices rising worldwide. U.S. motorists are paying an average of $4.05 per gallon, up from $2.98 before the war began on February 28.
The Reversal
The market’s reaction on Sunday followed more than two days of volatile trading tied to shifting signals from Iran about its control of the Strait of Hormuz. On Friday, crude prices plunged more than 9% after Iran announced it would fully reopen the waterway to commercial traffic. By Saturday, Iran had reversed that announcement and fired on several vessels.
Trump’s statement on Sunday—that the U.S. Navy had attacked and seized an Iranian-flagged cargo ship that allegedly tried to bypass the blockade—triggered Iran’s military command to vow retaliation.
Global Impact
The standoff has created one of the worst global energy crises in decades. Asian and European importers relying on Gulf oil have been hit hardest by halted supplies and production cuts, while rising gasoline, diesel and jet fuel prices affect businesses and consumers worldwide.
A gallon of regular gas cost an average of $4.05 in the U.S. on Sunday, according to motor club federation AAA—up from $2.98 before the war began on February 28. That’s about 8 cents lower than a week prior, yet far higher than prices before the conflict.
Timeline and Outlook
A fragile two-week ceasefire between the U.S. and Iran is set to expire Wednesday, but the Strait of Hormuz standoff has created doubt about whether resumed negotiations to end the war can proceed.
Energy Secretary Chris Wright told CNN on Sunday that fuel prices at the pump have “likely peaked, and they’ll start going down,” but cautioned that U.S. motorists might not see gas drop below $3 per gallon until next year.
The U.S.-Israeli war against Iran is in its eighth week. Crude has ranged from roughly $70 per barrel before the conflict began to spikes exceeding $119, with U.S. crude closing at $82.59 per barrel on Friday before Sunday’s 6.4% gain.
Industry analysts have warned that even if a lasting agreement to reopen the Strait of Hormuz emerges, oil shipments could take months to return to normal levels. Backed-up tanker traffic, shipowners concerned about renewed escalation, and energy infrastructure damaged during the war will all impede recovery.