Brent crude hits 4-year high, soaring past $126, as U.S. military to reportedly brief Trump on action against Iran

Brent crude oil prices surged to a four-year high, surpassing $126 per barrel, amid escalating tensions between the United States and Iran. The price jump followed reports that the U.S. military would brief President Donald Trump on potential military action against Iran, intensifying concerns over a possible armed conflict in the Middle East. The Wall Street Journal and Axios cited U.S. officials revealing that Trump had directed aides to prepare for an extended blockade of Iranian exports, with the U.S. Central Command presenting military options to the president. This development comes as Trump rejected Tehran’s proposal to reopen the strategically vital Strait of Hormuz, signaling the continuation of the naval blockade. The surge in oil prices reflects growing fears of supply disruptions through the Strait of Hormuz, a critical chokepoint for global oil shipments. Goldman Sachs estimates that exports through the strait have plummeted to just 4% of normal levels due to the blockade and stalled U.S.-Iran nuclear negotiations. Analysts warn that constrained Iranian exports and limited storage capacity could exacerbate supply shortages if the blockade persists. Although the United Arab Emirates plans to increase output following its exit from OPEC, this boost is expected to be gradual and unlikely to offset near-term supply tightness. Market sentiment is further influenced by geopolitical uncertainty and investor psychology, with traders closely monitoring tanker movements and political signals amid the ongoing U.S.-Iran standoff. President Trump’s recent social media post, which included a threatening message to Iran, underscored the heightened tensions. Despite some cushioning from strategic reserves and crude already in transit, product markets remain strained, particularly for diesel, which has seen sharp price increases alongside logistical challenges. Looking ahead, experts caution that oil prices could escalate further, potentially reaching $140 to $150 per barrel if disruptions continue. However, Goldman Sachs has also noted emerging risks to demand, with global oil consumption in April estimated to be significantly lower than in February, driven by reduced demand for jet fuel and petrochemical feedstocks. The evolving situation underscores the fragile balance between geopolitical risks and market fundamentals in the global energy landscape.