Trump insists on maritime blockade, Brent oil rises above $120 for eight consecutive days, Iranian speaker responds mockingly

The stalemate in the Strait of Hormuz is driving the global oil market from short-term shocks to a lasting repricing. The United States insists on imposing a maritime "blockade" against Iran, directly pushing Brent crude to rise for an eighth consecutive trading session and breach the $120 threshold. Meanwhile, global energy shortages have become acute, inflation expectations and bond market selling pressure have intensified in tandem, and market uncertainty continues to escalate.

On April 29, U.S. President Trump explicitly stated that he would maintain the maritime blockade against Iran until Tehran agrees to a deal that alleviates U.S. concerns over its nuclear program. He emphasized that the maritime blockade is "somewhat more effective than bombing" and bluntly remarked that Iran’s situation "will only get worse," making it clear he has no intention of lifting the measures in the near term.

The crude oil market reacted sharply. On Wednesday, Brent crude surged nearly 10% at one point, hitting $122.15 per barrel—the highest level since 2022—while notching an eighth consecutive daily gain, the longest winning streak in nearly four years. Over the same period, U.S. WTI crude rose 7% to settle at $106.88 per barrel. Following Trump’s unambiguous remarks on the blockade, traders’ optimism that a three-week ceasefire could restore normal energy flows in the Gulf region is gradually fading.

In response to the U.S. blockade, Iranian Speaker MB Ghalibaf posted on social media platform X: "Three days have passed, and no oil wells have exploded. We can extend this to 30 days and live-stream the oil wells here." He also mocked that those pushing the "blockade theory" have driven oil prices above $120, adding: "Next stop: $140."

Javier Blas, Bloomberg’s energy and commodities columnist, commented that the market had originally expected a "TACO" (i.e., "Trump Always Chickens Out") scenario, but the reality now is "NACHO" (i.e., "Not A Chance Hormuz Opens"). This assessment reflects a further cooling of market expectations for an early reopening of the Strait of Hormuz.

### "Blockade" Becomes the Core Bargaining Chip in U.S.-Iran Negotiations

As a critical artery for global energy transportation, the Strait of Hormuz carried roughly one-fifth of the world’s oil shipments before the conflict. Currently, due to Iranian threats of attacks and the U.S. maritime blockade, shipping activity in the strait remains nearly at a standstill, with vessel traffic plummeting by over 95% compared to pre-conflict levels and a large number of oil tankers stranded in Persian Gulf ports.

Trump’s latest remarks signal his outright rejection of Iran’s new negotiation proposal. The plan, relayed by Iran to the U.S. via Pakistan, advocates three-phase talks: the first phase focuses on ending hostilities, the second on resolving navigation in the Strait of Hormuz, and the third on the Iranian nuclear issue. U.S. officials disclosed that Trump is dissatisfied with the plan, primarily because the first two phases do not address the nuclear issue, which is central to U.S. demands.

For now, Trump views the sustained maritime blockade as his primary leverage to pressure Iran, stating explicitly that the U.S. would consider military action if Iran refuses to concede. Three sources familiar with the matter said U.S. Central Command has drawn up a "swift and fierce" strike plan against Iran, though Trump declined to disclose details of the military plan in public remarks.

Iran has also issued a stern response to the U.S. hardline stance. Iran’s Press TV quoted an unnamed senior security official on April 29 as saying that if the U.S. maintains its maritime blockade of Iran in the Strait of Hormuz, Iran will respond to Washington’s "ongoing acts of piracy" with "practical and unprecedented military action."

### Oil Prices Factor in "Long-Term Stalemate"

Crude oil’s rally accelerated on Wednesday, driven by a market reassessment of how long the Hormuz blockade might last. Previously, traders had widely bet on a sudden reopening of the strait, a view that capped further oil price gains. Following Trump’s latest statements, however, market expectations have shifted markedly, with prices now incorporating the risk that the blockade could persist for months rather than days or weeks.

Hamad Hussain of Capital Economics noted that the possibility of an early reopening of the Strait of Hormuz had been a key factor keeping oil prices in check, but the market is now pricing in a stronger likelihood that the U.S. blockade could last for months.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, said bluntly: "As long as there’s no end in sight to the blockade, oil prices will rise by a few dollars every day." He explained that the global crude market is tightening, and prices need to reflect that reality. Robert Yawger, Head of Energy Futures at Mizuho Securities USA, added that crude prices will keep climbing unless there is a plan to end the stalemate or at least reopen the strait.

Michelle Brouhard, Head of Policy and Geopolitical Risk at Kpler Ltd., said in an interview with Bloomberg TV that the Hormuz stalemate could last for weeks. In her view, a resolution would likely require either the global market signaling to Trump that it can no longer absorb oil shortages, or Iran indicating a willingness to resume oil exports.

### Inflation and Bond Markets Under Synchronized Pressure

The relentless rise in crude oil prices has spilled over into the bond market, triggering a chain reaction. The oil surge has sparked a sell-off in long-term U.S. Treasuries, pushing the 30-year yield above 5% for the first time since last summer. Traders are betting the U.S. economy could face more persistent inflationary pressures, clouding the outlook for Federal Reserve policy.

On Wednesday, the Fed held interest rates steady. In its statement, the central bank warned that the oil supply crisis stemming from Gulf hostilities is "heightening uncertainty about the economic outlook." Notably, some voting Fed policymakers opposed inserting language in the statement hinting at potential future rate cuts, underscoring how the Gulf conflict is influencing monetary policy discussions.

Fuel prices have also climbed. Data from the American Automobile Association (AAA) showed U.S. gasoline prices rose to $4.23 per gallon on Wednesday, the highest since the outbreak of the U.S.-Israel war against Iran. For major economies, rising energy costs risk stoking inflation anew and impeding economic recovery.

### UAE’s OPEC Exit Fails to Ease Supply Concerns

A new layer of uncertainty has emerged on the supply side, though markets have so far shrugged it off. The UAE announced on Tuesday that it is withdrawing from OPEC (Organization of the Petroleum Exporting Countries), but the move has done little to ease concerns about tight supply, with traders continuing to bet on higher oil prices.

Since the Gulf conflict began, the UAE’s crude output has remained well below its OPEC quota, constrained by Iranian threats to shipping in the Strait of Hormuz that have severely limited its export capacity. Analysts said that even if the UAE has scope to boost production, additional supply would struggle to reach global markets without the strait reopening, leaving the core energy shortage unaddressed. The UAE’s exit from OPEC is driven by a desire to escape production quotas, adjust output flexibly, capitalize on a "war premium" due to its geographic position, and fund domestic economic diversification.

Nadège Dufossé, Global Head of Multi-Asset at Candriam, said the initial geopolitical shock is entering a more protracted phase. For investors, the key variables have shifted from daily oil price moves to the duration of the blockade, inflation repricing, and whether central banks will be forced to rethink their interest rate paths.

### Risk Warning and Disclaimer

Investing in financial markets involves risk. This content does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation or needs of individual users. Users should assess whether any views, opinions or conclusions herein are suitable for their circumstances. Investments are made at your own risk.