Oil prices rose in volatile trade on Monday, remaining close to recent peaks after U.S. President Donald Trump issued a 48-hour deadline for Iran to reopen the Strait of Hormuz.
Brent oil futures rose 0.6% to $112.91 a barrel by 00:26 ET (04:26 GMT), while West Texas Intermediate crude futures rose 0.8% to $99.05 a barrel.
Focus remained on efforts by the U.S. and its allies to offset supply disruptions stemming from Iran. Washington over the weekend issued a 30-day waiver on buying Iranian oil already at sea.
International Energy Agency head Fatih Birol said last week that the Iran oil crisis could be worse than the 1973 and 1979 oil crises.
Trump issues 48-hr deadline for Iran to reopen Hormuz
Trump on Saturday evening said Iran had 48 hours to reopen the Strait of Hormuz, or else the U.S. would “obliterate” critical energy infrastructure in the country.
Iran said it would retaliate to U.S. aggression by completely closing the Strait of Hormuz and attacking energy and water systems in its surrounding Gulf neighbors. Reports showed the country launching fresh strikes on Israel in the early hours of Monday.
Trump’s threat came just a day after reports said he was considering “winding down” the war with Iran, even as Washington continued to deploy more troops and ships to the Middle East.
Iran has kept the Strait of Hormuz effectively blocked since the U.S.-Israel war on Tehran began in late-February.
The move sparked widespread disruptions in global oil supplies, given that roughly 20% of the world’s oil consumption passes through the shipping lane.
Oil had jumped to nearly $120 a barrel earlier in March, and has remained close to the level amid growing concerns that a prolonged conflict will greatly disrupt global supplies.
Goldman Sachs hikes oil price forecast
Goldman Sachs on Sunday hiked its oil price forecast for the second time in two weeks, citing growing structural risks in global supplies due to a prolonged conflict in the Middle East.
The investment bank expects Brent to average $110/barrel in March-April, up from a prior forecast of $98/barrel.
Goldman Sachs analysts said they expect oil flows through the Strait of Hormuz to remain at just 5% of normal levels for a longer six-week period, before a gradual one-month recovery.
But this prolonged disruption in Hormuz flows is expected to see markets price in a greater risk premium for crude.
Goldman Sachs also expects Brent to average around $85/barrel in 2026, up from $77/barrel, and for WTI to average around $79/barrel, up from $72/barrel.
investing.com
