Trump orders Iran naval blockade plans; Brent tops $115

President Donald Trump directed aides to prepare an extended naval blockade of Iranian ports, sending Brent crude above $115 per barrel on April 29. The International Energy Agency called the effective shutdown of the Strait of Hormuz “the largest supply shock on record.” The closure has removed about 20% of seaborne oil and liquefied natural gas shipments from regular trade routes.

Brent reached its highest level since June 2022, marking an eighth straight session of gains. West Texas Intermediate rose above $102 per barrel. Traders pointed to stalled U.S.-Iran talks, the near halt of tanker traffic through the strait and threats of additional U.S. sanctions as drivers of the price rally.

U.S. equity markets edged lower and bond yields rose. The S&P 500 and the Dow slipped while the Nasdaq fell ahead of major technology companies’ earnings reports. The 10-year U.S. Treasury yield climbed to about 4.39%, reflecting investor concern that higher fuel costs could feed into inflation.

The Federal Reserve was widely expected to hold interest rates at its meeting, with Chair Jerome Powell set to emphasize that policy remains data-dependent. The meeting is scheduled before the end of Powell’s term in May. Officials and investors are tracking how rising fuel prices affect consumer inflation.

Maritime reports show Iran has restricted tanker traffic through the Strait of Hormuz to near zero since late February in response to U.S. military pressure. Tehran has maintained it can reroute some exports and that disruptions will continue while trade and financial pressures persist. Iranian authorities reported annual inflation near 53.7%, the rial trading around 1.8 million per U.S. dollar and widespread job losses.

On his platform, Trump wrote that Iran should “get smart soon” and urged Tehran to “sign a deal,” framing the blockade as an alternative to renewed airstrikes. Washington is also considering sanctions on Chinese refiners and on countries that pay transit fees related to Hormuz shipments.

The United Arab Emirates confirmed it will leave OPEC on May 1 to gain flexibility over its production policy. U.S. refiners are switching to more expensive summer-blend gasoline, and the national average for a gallon of regular gasoline reached about $4.229.

The World Bank estimated prolonged interruptions to energy supply could push energy prices sharply higher this year. Peace negotiations collapsed in Pakistan in mid-April, and an early-April ceasefire remained fragile. Market participants noted any agreement to reopen the strait could quickly reverse recent oil gains.