International Economic
Oil prices hit one-month high on Trump plan for 'extended' Iran naval blockade
By Michele Maatouk
Date: Wednesday 29 Apr 2026
(Sharecast News) - Oil prices hit a one-month high on Wednesday following a report that US president Donald Trump has instructed aides to prepare for an extended naval blockade of Iran.
According to the Wall Street Journal, citing US officials, Trump is targeting the regime's coffers in a high-risk bid to compel a nuclear capitulation Tehran has long refused.
It was understood that in recent meetings, including a Monday discussion in the Situation Room, Trump opted to continue squeezing Iran's economy and oil exports by preventing shipping to and from its ports.
Officials told the WSJ that Trump had assessed that his other options - resume bombing or walk away from the conflict - carried more risk than maintaining the blockade.
Brent crude rose on the news and by 1540 BST, it was trading at a one-month high, up 5% at $116.80 a barrel.
Kathleen Brooks, research director at XTB, said: "Anyone hoping for the blockade to come to an end this week have been deeply disappointed. The latest news from the White House suggests that President Trump is looking at measures to maintain the blockade for an extended period if necessary.
"The President met with oil company executives, presumably to boost US refinery production, especially for diesel and jet fuel. Financial markets will now need to price in the prospect of a prolonged blockade. This is obviously impacting on the oil price, which is higher by nearly 10% in the past five sessions. It could also lead to higher futures prices, as the market adjusts to a long-term closure of the Strait.
"We assume the President wants US oil companies to boost production, however, if US oil refineries focus on ramping up production of jet fuel and diesel, it could reduce output of other products, which may lead to broader inflationary pressures for the global economy. This is a new phase of the war in Iran, and we could now see oil prices go back to the March highs around $120 per barrel for Brent."
Brooks cautioned that as always with Trump, his rhetoric on Truth Social may not reflect reality.
"The President has also urged Iran to sign a deal to end the US blockade. The US is using the blockade to squeeze Iran, we will now find out how long they can hold out.
"If this is a long-term blockade, we will find out whether financial markets are underpricing the risks of the war in the Middle East."
Chris Beauchamp, chief market analyst at IG, said: "Oil's sojourn below $100 didn't last long, and it was never going to while the Straits of Hormuz remain closed. Now, with the blockade expected to roll on for weeks the oil market is once again reflecting the growing panic around the globe.
"At some point equities might start to notice properly, but for now they are keeping their eyes firmly on US earnings growth."
Investors were also weighing up news out on Tuesday that the United Arab Emirates plans to exit the Organization of the Petroleum Exporting Countries (Opec) and Opec+ with effect from 1 May.
Rabobank said the move does not change anything about the near-term supply-demand balance. "Only after the Iran war ends, and the Strait of Hormuz reopens can we discuss the UAE ramping up oil production," it said.
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