Oil prices extended gains in Asian trade on Tuesday, with Brent Crude topping $111 per barrel, as the Strait of Hormuz remains inaccessible for more than eight weeks and the U.S.-Iran talks are nowhere near resumption.
In the early morning in Europe, the Brent Crude futures were rising by 2.61% to $111.10 per barrel. The U.S. benchmark, WTI Crude, was creeping toward the $100 a barrel mark and traded 3% higher at $99.26.
The market appears to have started to price in the longer-than-expected disruption at the Strait of Hormuz, where 20% of daily global oil and LNG flows passed before the war.
In the early days of the war, which is two months long today, most analysts had anticipated that the Strait of Hormuz outage would be short-lived and the chokepoint would reopen at some point in April.
As of April 28, no signs point to any re-opening anytime soon, as the U.S. and Iran did not meet for talks this weekend and U.S. President Donald Trump has signaled there wouldn’t be negotiations until Iran renounces all nuclear program ambitions.
With the Strait of Hormuz blockage extending into its ninth week, oil market analysts began to reassess the timelines for a potential return to some kind of normal traffic at the Strait and raised their oil price forecasts as the disruption drags on for longer they had expected.
ING on Tuesday raised its oil price forecasts “as peace talks between the US and Iran stall, and with no immediate signs of a resumption in flows through the Strait of Hormuz,” said Warren Patterson, Head of Commodities Strategy at the bank.
ING’s new base case sees ICE Brent averaging $104 per barrel in the second quarter, up from $96 previously. The significant inventory drawdown and slow recovery towards pre-war flows is set to anchor Brent at an average of about $92 per barrel in the fourth quarter of 2026, said the bank, whose previous Q4 forecast was $88 per barrel.
“We are now assuming that oil flows through the Strait of Hormuz will slowly start resuming in May and June, and remain below pre-war levels for most of the year,” ING’s Patterson said.
“Low inventories and the need to restock, whether commercial or strategic reserves, also suggest that oil prices will remain relatively well supported for the foreseeable future.”
Over the weekend, Goldman Sachs once again raised its outlook for oil prices, now seeing Brent crude at an average of $90 per barrel in the fourth quarter of the year, and West Texas Intermediate at $83 per barrel.
By Tsvetana Paraskova for Oilprice.com
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