Brent crude oil futures posted over a 60% gain in March. This marked the strongest monthly rally in the benchmark’s history, dating back to 1988.
The May contract settled roughly 5% higher on Tuesday at $118.35 per barrel. West Texas Intermediate (WTI), the US benchmark, climbed about 51% during the month for its best performance since May 2020.
Strait of Hormuz Closure Drives Historic Supply Shock
Iran’s closure of the Strait of Hormuz following joint US-Israeli strikes on February 28 has rattled energy markets. The International Energy Agency (IEA) described the disruption as the largest in the history of the global oil market.
The energy shock has already hit consumers hard. US gas prices have risen $1.25 per gallon since December to $4 per gallon. This marked the highest price since 2022.
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In the UK, petrol reached 152.8p per liter, roughly 20p higher than at the start of the conflict. JPMorgan’s global head of economics, Bruce Kasman, warned that a prolonged closure would push oil prices higher.
“A scenario in which the Strait remains closed for an additional month would be consistent with oil prices rising towards $150/bbl and constraints on industrial consumers of energy supply,” he said.
Bloomberg reported that US officials and Wall Street analysts have started discussing the possibility of crude reaching $200 per barrel.
Meanwhile, President Donald Trump suggested the US could end operations in Iran within two to three weeks. According to the Wall Street Journal, Trump told aides he would be willing to end the military campaign even if the Strait of Hormuz remained largely shut.
Separately, the Journal also reported that the United Arab Emirates is preparing to assist the US in reopening the waterway by force.
Whether a diplomatic resolution, military withdrawal, or forced reopening of the strait comes first will likely shape whether oil markets stabilize or continue climbing.
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