Oil jumped above $125 a barrel as markets reacted to stalled diplomacy and talk that Washington is weighing military strikes on Iran. Brent for June rose to $125.36, while U.S. Crude traded near $109.30 a barrel, after weeks of supply disruption tied to the closed Strait of Hormuz and a U.S. Blockade of Iranian ports. The conflict, now into its ninth week, has paused large-scale combat under a fragile ceasefire but left talks deadlocked over nuclear and shipping demands. The coming days hinge on a briefing to the U.S. President on strike options and whether any proposal to reopen the strait can break the impasse.

President Donald Trump is due to receive a briefing on detailed military options aimed at Iran, including a series of strikes, officials say. The White House is weighing whether force could push Tehran back to negotiations over its nuclear programme. The U.S. And Israel began air strikes on Iran on Feb. 28, and Iran responded by cutting off nearly all shipping through the Strait of Hormuz. Washington has also imposed a blockade on Iranian ports while diplomatic channels have produced little forward movement.

Military options on the table

Analysts and policy papers outline a range of U.S. Options. Those range from limited, targeted strikes to broader campaigns intended to degrade Iran's military and security forces. Some planners have discussed decapitation-style attacks on senior commanders or facilities. Other options focus on hitting the narrow number of export terminals and tankers that still move Iranian oil, with the stated aim of squeezing Tehran's revenue.

Those measures come with trade-offs. Targeted strikes could impress decisiveness, officials argue. They could also provoke an escalatory response. Hitting export infrastructure would damage Iran's oil income, but leaders in Tehran have warned that preventing Iranian oil exports would trigger even wider disruption to regional shipping.

Oil shock and supply disruption

Markets moved sharply on the prospect of renewed military action. Brent crude for June delivery climbed 6.2 per cent to $125.36 a barrel, while U.S. West Texas Intermediate rose to about $109.30 a barrel. Both benchmarks are on track for their fourth month of gains. Before the conflict began in late February, Brent was trading around $70 a barrel.

Traders and energy analysts cite two main drivers. First, the Strait of Hormuz remains closed to most commercial shipping, removing a key route for Gulf oil. Second, the U.S. Blockade of Iranian ports narrows the sea routes available to exporters and to neutral shippers.

Mastheads

Those disruptions have pushed importers to seek scarce alternate supplies and helped send prices higher.

Market strategists say the oil world has moved from over-optimism to pricing in a sustained supply gap. "The oil market has moved from over-optimism to the reality of the supply disruption we're seeing in the Persian Gulf," ING analysts said in a note. "Prospects for any near-term resolution to the Iran conflict or a reopening of the Strait of Hormuz remain dim," said Tony Sycamore, IG market analyst.

Producers are responding in fits and starts. Opec+ ministers are likely to agree a modest production increase of about 188,000 barrels per day at an upcoming meeting. That small boost follows the United Arab Emirates' formal withdrawal from Opec effective May 1, a move that will let the UAE raise output when exports restart but will do little to offset the current disruption, analysts say. Firms such as Wood Mackenzie estimate Gulf states will need months to rebuild to pre-war production rates.

Diplomacy and blocked talks

Diplomatic channels haven't delivered a clear path out of the crisis. Tehran has put forward proposals aimed at ending hostilities and reopening the strait. Those offers haven't yet unlocked a deal. Washington insists any negotiations include Iran's nuclear activities. Tehran is pressing for control over access to the strait and for reparations tied to war damage. The two positions remain out of alignment.

Ceasefire arrangements have paused large-scale combat, but they haven't resolved the strategic standoff. International leaders have shuttled to the region and offered to mediate. Key actors such as regional states and major powers continue to engage, but a shared framework for reopening shipping lanes and lifting the blockade hasn't emerged.

Political and economic consequences

Rising oil prices flow through global markets quickly. Higher fuel costs raise transport and manufacturing bills. That feeds consumer price pressures worldwide. Central banks watching inflation will note broad effects on headline numbers. Companies that rely on just-in-time supply chains face higher costs and delay risk. Shipping firms have rerouted vessels and raised freight rates to account for longer voyages and added insurance premiums.

For governments, the calculus is both economic and strategic. The United States signals that military pressure is an instrument to shape Iran's choices. Some analysts say tougher sanctions and strikes could weaken the regime by choking revenue streams and eroding elite support. Others warn of a longer, more chaotic cycle of violence that could push costs even higher.

Opec+ moves and the UAE's exit make the supply picture. Even if producers agree to add modest volumes, analysts stress that restarting and sustaining output in the Gulf will take time. That gap places upward pressure on prices until shipping through Hormuz can resume and damaged or idled capacity is restored.

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The U.S. President is due to receive a briefing on strike options that could determine whether the Strait of Hormuz reopens.

This article was created with AI assistance.