Brent crude jumps above $120 on Hormuz blockade talk

Why oil is moving sharply again

Brent crude oil climbed above $120 a barrel on Thursday after US President Donald Trump said the US naval blockade linked to the Strait of Hormuz would continue until Iran agrees to a deal with Washington. The move extended a sharp rally that has already pushed prices to levels last seen around the early phase of the Ukraine war in 2022. Traders have been reacting to the risk that disruption around Hormuz could persist, keeping physical supply tight. The Strait of Hormuz is a narrow waterway through which about one-fifth of global oil typically transits. That makes any military or policy action affecting shipping routes a direct driver of price volatility.

Trump’s Axios interview and the blockade message

In an interview with Axios on Wednesday, Trump described the blockade as a key pressure tool aimed at Iran’s nuclear programme. He said the blockade was “somewhat more effective than the bombing” and indicated it would not be lifted before Iran addresses US concerns. Axios reported that Trump rejected Iran’s proposal to reopen the Strait of Hormuz and lift the blockade before holding nuclear talks. Instead, Trump’s position was that negotiations cannot start with the US easing restrictions first. He also said Iran is seeking an agreement to lift the blockade on the waterway and claimed Iran’s inability to export oil has left its infrastructure “close to exploding.”

Military contingency plans add to risk pricing

Axios reported that US Central Command has developed plans for a “short and powerful” wave of aerial strikes if Iran does not agree to negotiations. Trump, according to the same report, has not authorised military action and declined to discuss specific military plans in the interview. Separately, Trump said Washington knows where Iran moved new military equipment during the ongoing ceasefire. He warned that the equipment would be destroyed quickly if hostilities resume. These statements added to market concern that the situation could shift quickly from economic pressure to kinetic escalation.

OPEC uncertainty as the UAE exits OPEC and OPEC+

Oil markets were also rattled by the United Arab Emirates’ decision to exit OPEC and OPEC+, according to the material provided. The move injects uncertainty into producer coordination at a time when prices are already reacting to geopolitical stress. With volatility elevated, any change in expectations around supply management can amplify intraday swings. The combination of geopolitical disruption risk and questions around producer alignment has been a key backdrop to the latest spike.

US inventory signals: lower stocks and record exports

US inventory data added another layer to the price jump. The article text cites sharp declines in crude and fuel stockpiles. It also notes that US crude exports surged to a record above 6 million barrels per day. These datapoints supported the view that near-term supply conditions are tightening. In such a setup, the market typically prices more aggressively for downside risks to supply.

White House outreach to energy executives

Trump met oil company and trading house executives at the White House on Tuesday to discuss sustaining the blockade for an extended period, as described in the report. A White House official said the meeting covered efforts “to alleviate global oil markets” and steps that could allow the blockade to continue “for months if needed” while minimising impact on American consumers. Chevron’s spokesperson said CEO Mike Wirth attended the meeting to discuss global oil markets. The topics listed included domestic production, oil futures, shipping, and natural gas.

Policy steps cited: waivers, the Defense Production Act, and stockpile releases

The report mentions several measures aimed at cushioning market stress. The Trump administration granted a 90-day waiver extension to the Jones Act, allowing foreign-flagged vessels to move commodities such as oil products and fertiliser between US ports. The administration also invoked the Defense Production Act, authorising the Pentagon and the Department of Energy to take actions including purchases to expand domestic energy efforts. Separately, it agreed to loan 172 million barrels of oil from the Strategic Petroleum Reserve. This was described as part of a wider agreement with the International Energy Agency to release 400 million barrels from global stockpiles, roughly about the amount the world uses in four days.

What the price action shows

Brent rose more than 7% in a session in the reported moves, and one data point cited Brent oil futures rising 7.6% to $119.69. Another cited level was Brent at $119.20, up 7.14%. US crude was reported up 6.61% to $106.58 a barrel. The text also says this marks the fourth straight month of gains for crude, with prices up 17.8% in April so far, building on a rally of over 63% in March linked to the onset of the US-Israeli war with Iran. The latest jump also erased losses seen since the US and Iran agreed to a temporary ceasefire, with investors positioned for a longer conflict.

Key facts snapshot

Why this matters for India and global markets

For import-dependent economies, higher crude prices can quickly feed into inflation expectations, transport costs, and corporate margins for fuel-intensive sectors. The narrative in the reports is that pricing is being driven by both shipping disruption risk around Hormuz and the policy stance that the blockade could last months. For investors, the key inputs to watch are the duration of restrictions, any confirmed change in shipping flows, and the extent to which stockpile releases and US supply response offset tighter conditions.

Conclusion

Brent crossing $120 reflects a market that is pricing sustained disruption risk after Trump said the Hormuz-linked blockade will not be lifted until Iran agrees to US terms on a nuclear deal. With reported contingency strike plans, an OPEC coordination shock from the UAE exit, and US inventory and export data pointing to tighter supply, volatility is likely to remain elevated. The next market catalyst, based on the text provided, is any official movement on talks or a confirmed change in the blockade’s scope and enforcement.