Crude Surges 5% as Skepticism Clouds Hormuz Transit Agreement

Energy markets reacted sharply to the latest developments in the Persian Gulf, with Brent crude and WTI futures jumping approximately 5% on Monday. As reported by CNBC, the price surge was driven by growing skepticism that the United States and Iran would reach a deal to restore ship traffic through the Strait of Hormuz. The market volatility reflects a broader supply crisis; the World Bank recently noted that global oil supply has crashed by 10% since the onset of the conflict, leading to a projected deficit of 3.7 million barrels per day (mb/d) in the second quarter of 2026. While the U.S. Energy Information Administration (EIA) has forecasted that Brent prices could fall below $80 per barrel later this year if transit resumes, current prices remain stubbornly above the $100 threshold. The disruption has not only affected oil but has also sent shockwaves through the natural gas sector. According to the Congressional Research Service, Asian natural gas prices have increased by 66% since February, as roughly 19% of the world's liquefied natural gas (LNG) trade remains trapped behind the choke point. Traders are currently pricing in a 'geopolitical premium' due to the uncertainty of the U.S. naval blockade and the potential for further Iranian retaliation. The International Energy Agency (IEA) has attempted to mitigate the impact through the largest-ever release of emergency oil stocks, but these measures have only partially alleviated the shortage. Market analysts at CFRA Research suggest that even if a deal is announced this week, the time required for insurance providers to regain confidence and for tankers to resume normal schedules means that supply chains will remain tight through the end of the year. The focus now shifts to the Wednesday diplomatic deadline, which will likely determine whether prices continue their upward trajectory or begin a long-awaited retreat.