Oil surges back up as Iran says Strait of Hormuz is closed, US Navy seizes Iranian vessel
Oil surges back up as Iran says Strait of Hormuz is closed, US Navy seizes Iranian vessel
Jake ConleyMon, April 20, 2026 at 1:02 PM UTC
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Oil prices surged higher Monday morning after a whirlwind weekend of headlines from the Middle East ended in the US Navy's capture of an Iranian-flagged cargo ship on Sunday and a fractious outlook on potential second-round peace talks.
Futures on Brent crude (BZ=F), the international benchmark, climbed by more than 5% through Sunday night and into Monday morning to trade above $95 per barrel before slightly paring gains. Those on the US benchmark West Texas Intermediate (WTI) crude (CL=F) gained a stronger 6% to trade around $87.60 per barrel.
Both products on Monday reversed roughly half of their losses incurred on Friday when Iranian foreign minister Abbas Araghchi announced that the Strait of Hormuz, the world's most critical chokepoint for global energy flows, was "completely open" to commercial traffic.
Fewer than three days later, Iran's Revolutionary Guard Corps announced that the strait remained closed and fully in Iranian control on account of the US Navy's blockade, a bevy of ships attempted to make the crossing before turning back, and the US military fired at and seized an Iranian vessel.
Read more: What an extended war with Iran could mean for gas prices
"Markets appear to view the past few months as inconsequential, but recent weekend events may preview a new normal around the Strait—intermittent closures, reopening risk, and continuous on/off tolls," Jefferies energy analyst Lloyd Byrne wrote in a recent client note.
In the Strait of Hormuz, vessel traffic has come to a near total standstill.
Between Friday and Saturday, 23 vessels — 16 of them laden with cargo ranging from crude oil to fertilizer and iron ore — crossed from the Persian Gulf into the Arabian Sea, according to data from maritime intelligence firm Kpler, marking one of the busiest stretches of traffic since the war began.
As of early Monday, only two vessels had exited the Strait of Hormuz since midnight Sunday morning — one each carrying industrial chemicals and refined crude products — and only two had entered. Traffic through the disputed waterway remains roughly 90% below prewar levels.
The on-the-ground reality in the Strait of Hormuz represents a dizzying turnaround from only days before.
On Friday, after the Iranian foreign minister said the strait was open, President Trump said in comments to reporters and posts on Truth Social that Iran had agreed to indefinitely suspend its nuclear enrichment program, that Iran had committed to never again closing the strait, and that the two sides would be meeting over the weekend for second-round negotiations.
Read more: How oil price shocks ripple through your wallet, from gas to groceries
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Futures on both Brent and WTI crude shed roughly 10% while equity markets surged as the market priced in potential hopes of a near-end to a war that has roiled global markets.
"The Strait of Hormuz has been the single most consequential variable in global oil markets since the conflict escalated, and any credible signal that the chokepoint may reopen, even temporarily, is a market-moving development of the first order," Artem Abramov, deputy head of analysis at Rystad Energy, said on Friday.
Two days later, on Sunday morning, Trump renewed his threat to strike bridges and power plants throughout Iran if the regime doesn't meet US demands.
"We're offering a very fair and reasonable DEAL, and I hope they take it because, if they don't, the United States is going to knock out every single Power Plant, and every single Bridge, in Iran," the president wrote on Truth Social. "They'll come down fast, they'll come down easy and, if they don't take the DEAL, it will be my Honor to do what was to be done."
The Iranian state-controlled news agency Tasnim said Sunday that the Bab-el-Mandeb Strait, the port of Yanbu on the Red Sea, the port of Fujairah on the Gulf of Oman, and Saudi Aramco's infrastructure had all "enter[ed] the conflict zone."
Military action against those targets by Iran would potentially threaten the roughly 7 million barrels per day of oil crossing west through Saudi Arabia to the Red Sea, and the roughly 1.5 million barrels per day traveling to the Omani coast through the UAE's Abu Dhabi Crude Oil Pipeline.
Tankers and bulk carriers anchored in the Strait of Hormuz on, April 18, 2026. (AP Photo) ()
The 10-day ceasefire between Iran and the US, which both sides claim the other has broken, is set to expire at 8 p.m. ET on Tuesday. In comments on Sunday, President Trump said special envoy Steve Witkoff — who, along with the president's son-in-law Jared Kushner, has been leading negotiations with Iran — will travel to Islamabad, Pakistan, for second-round talks.
Iran has not confirmed whether it will send envoys to Pakistan, a spokesperson for the foreign ministry said Monday morning, and figures close to the regime have denied that Tehran ever agreed to the terms Trump announced on Friday, including a full suspension of the country's nuclear program.
Asked on Saturday whether he would consider an agreement with Iran to extend the current ceasefire, President Trump said he was unsure, but that the US Navy's blockade of the Strait of Hormuz — intended to deprive Tehran of oil export revenues — would remain in place. The president added that the US would "have to start dropping bombs again."
In Iran, an X account understood to be close to the regime said Monday morning that a "naval conflict between the Iran and America" had "effectively begun."
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at [email protected].
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