The long-term trend of international oil prices rising under the prolonged blockade of the Strait of Hormuz

International oil prices have once again turned upward amid concerns that the second round of US-Iran ceasefire negotiations has stalled and the long-term blockade of the Strait of Hormuz.

According to Bloomberg on the 27th, as of 2:25 PM Korea time, the June delivery Brent crude oil futures price rose 1.97% from the previous trading day, at $107.40 per barrel. At the same time, the June delivery US West Texas Intermediate crude futures also increased by 1.69%, at $96.00 per barrel. Previously, international oil prices declined after rising over five trading days on the 24th due to market expectations of a restart of the US-Iran second ceasefire negotiation, but then rebounded after face-to-face talks broke down.

The market considers the potential disruption of Middle Eastern oil supplies as the biggest variable. This is because approximately 20% of global crude oil and petroleum product transportation passes through the Strait of Hormuz, which remains under blockade, and delays in negotiations have directly triggered supply anxiety. In fact, according to the American Automobile Association, as of the 26th, US gasoline prices were $4.10 per gallon, up 37% from before the outbreak of the Iran conflict; diesel prices were $5.46 per gallon, up 45%. This indicates that rising crude oil prices are being transmitted to consumer prices through refinery and transportation costs.

Major investment banks are also raising oil price expectations or maintaining high forecasts. Goldman Sachs analyst Dan Sturzenegger, in a report on the 27th, raised the expected average price of Brent crude oil in the fourth quarter of this year from $80 to $90. Expectations for the second and third quarters were also raised to $100 and $93, respectively. He believes that the timeline for the Gulf region’s exports to return to normal will be delayed from mid-May to the end of June, and the recovery of oil-producing countries’ output will be relatively slow. Based on this, it is estimated that the global daily supply gap in the second quarter will reach 9.6 million barrels. Morgan Stanley also analyzed that, due to the closure of the Strait of Hormuz, daily crude oil exports from Gulf countries decreased by 14.2 million barrels, leading to a daily reduction of 4.8 million barrels in global oil inventories. The firm maintained its previous forecasts of Brent crude oil prices at $110 for the second quarter, $100 for the third quarter, and $90 for the fourth quarter.

The tone of US negotiations with Iran is also seen as a factor exacerbating market uncertainty. US President Donald Trump told Fox News in a phone interview on the 26th that he would hold a phone call with Iran and said that if Iran is willing, they can contact the US. He also stated that he does not intend to make US negotiation teams spend 18 hours traveling. Previously, the US planned to send a delegation to Pakistan for negotiations on the 25th, but it was postponed due to Iran’s apparent lack of willingness to negotiate. Market interpretations suggest that such remarks are more about exerting pressure on Iran than leaving room for restarting negotiations. This trend indicates that future international oil prices are likely to fluctuate significantly based on the actual pace of export recovery in the Middle East and the progress of diplomatic negotiations.