The United States Navy’s blockade of Iranian ports, declared Monday after peace talks in Islamabad collapsed, has pushed Brent crude close to $100 a barrel and triggered warnings of deeper market disruption, as global investors scramble to assess the economic fallout from the escalating US-Iran conflict.
The blockade, which targets vessels entering or departing Iranian ports and coastal areas including all Iranian ports on the Arabian Gulf and Gulf of Oman, came into effect after marathon talks between Washington and Tehran failed to produce an agreement over the weekend. Brent crude, the global oil benchmark, has risen by around 40 percent since the war began and was nearing $100 a barrel on Monday.
Nigel Green, chief executive of global financial advisory firm deVere Group, warned that a sustained disruption to the strait could push prices far beyond current levels. “Take that flow out of the system and Brent doesn’t move five or ten dollars, it moves structurally higher,” he said. “A spike toward $120 or beyond becomes realistic very quickly, and that resets inflation expectations globally.”
The strait normally carries around 20 percent of the world’s oil and natural gas, and the restriction of shipments since the conflict began has raised energy and agricultural input costs worldwide, with 230 loaded oil tankers reported waiting inside the Gulf.
Green said energy producers stand to benefit immediately from the pricing power surge, while import-dependent sectors face a direct hit. “Airlines, shipping firms, chemicals, and heavy manufacturing lose it just as fast. Investors should be rotating capital accordingly rather than waiting for earnings revisions to catch up,” he said.
On currencies, the deVere chief forecast divergence between oil exporters and importers, with the Norwegian krone and Canadian dollar likely to strengthen while the euro, Indian rupee, and Japanese yen face pressure from rising import costs.
A sustained oil spike also threatens to upend central bank policy. “Markets have been positioned for easing cycles. A sustained move in oil forces central banks to pause or even tighten again,” Green warned, adding that high-valuation technology stocks are especially exposed to the repricing of rate expectations.
British Prime Minister Keir Starmer said Monday that his government is focused on reopening the strait as quickly as possible, while French President Emmanuel Macron announced preparations for a multinational mission to restore freedom of navigation, with a conference planned within days alongside the United Kingdom. US Energy Secretary Chris Wright said oil prices would likely keep rising until meaningful ship traffic resumes through the waterway, which he anticipated could occur within a few weeks.
The Kremlin warned Monday that the blockade would likely hurt global trade markets, while China urged calm and said keeping the strait safe and unimpeded serves the common interests of the international community.
