Oil price rises above $120 after reports of 'extended' Iran blockade

An important development from the financial markets: Oil price rises above $120 after reports of 'extended' Iran blockade 7 hours ago Share Save Add as preferred on Google Naomi Rainey , Emer Moreau and Jonathan Josephs , Business reporters Getty Images Crude oil is a key ingredient in petrol and diesel Oil prices have soared following reports that the US is preparing for an "extended" blockade of Iran. The global benchmark oil price, Brent crude, rose above $120 (£89) a barrel on Wednesday, briefly hitting $122, its highest price since 2022. The understands that energy executives including Chevron chief executive Mike Wirth met US President Donald Trump at the White House on Tuesday to discuss how to limit the fallout from the conflict on American consumers.

Oil traders appear to have taken the meeting as a sign the effective closure of the Strait of Hormuz will continue for a long time. The executives discussed topics including domestic energy production, progress in Venezuela, oil futures, natural gas, and shipping, according to a White House official. They described the meeting as being part of the President's regular meetings with energy executives to discuss their industry.

Economic Details

The meeting follows separate reports from the Wall Street Journal that US President Donald Trump has instructed aides to prepare to extend the ongoing blockade of Iran's ports, in an effort to squeeze the country's economy. Iran has said it will continue to disrupt traffic travelling through the Strait of Hormuz in response to the US blockade. The price of oil has seen sharp swings since the start of the war, as the key Strait of Hormuz has been effectively closed for weeks due to the conflict.

Iran has severely restricted shipping through the strait — which usually carries about a fifth of the world's supply of oil and liquid natural gas — in response to US and Israeli strikes that began on 28 February. Earlier this month, Tehran warned that any vessel that approaches the strait would be targeted. The US then announced that its forces would intercept or turn back vessels travelling to or from Iran's ports.

Analysis by Verify shows that at least four vessels tracked from Iranian ports appear to have crossed the US blockade line. Despite the fluctuations of recent weeks, the price of oil remains much higher than the pre-conflict price of a barrel. The price of Brent crude dropped to $90 a barrel on 17 April, after a ceasefire between Israel and Lebanon was announced.

Analyst Views

The US said it would pause attacks on Iran on 8 April. It remains much higher than the pre-conflict price of a barrel. However, the oil benchmark has been rising steadily over the last 12 days, as the US continued its blockade.

Lindsay James, investment strategist at Quilter, said that the impact of the war so far in the UK has been largely limited to higher petrol and diesel prices, but "every day that passes without a resumption of supply sees the risk of physical shortages and steeper price rises on a range of goods increasing".

Financial markets are tracking the development closely as investors assess the likely impact.