[International Oil Prices] Strait of Hormuz blocked again…WTI surges 7%

Ships anchored and stopped in the Strait of Hormuz

International oil prices rebounded by nearly 7%.

Concerns about crude oil supply disruptions resurfaced after Iran again closed the Strait of Hormuz in response to the U.S. naval blockade.

On the 20th (U.S. Eastern Time), the price of West Texas Intermediate (WTI) crude for May delivery closed at $89.61 per barrel on the New York Mercantile Exchange, up $5.76 (6.87%) from the previous trading session.

The Iranian Islamic Revolutionary Guard Corps (IRGC) Navy eventually began re-blocking the Strait of Hormuz on the 18th. This came just one day after the Iranian government declared the Strait of Hormuz open.

This is a "counter-measure" following the U.S. continuation of blockade measures to cut off ships traveling to and from Iran.

WTI even surged by 8.77% in Asian trading, exceeding $91.

What somewhat calmed WTI was the expectation of negotiations between the U.S. and Iran.

U.S. President Donald Trump, in an interview with the New York Post today, dismissed the possibility of negotiation breakdown with Iran, stating, "We are going to proceed with negotiations." President Trump added that the U.S. negotiating team is moving to Islamabad, the capital of Pakistan.

The New York Times (NYT) reported that the Iranian negotiating team plans to move to Islamabad on the 21st. The Associated Press (AP) reported that Iran has expressed its willingness to participate in a second round of negotiations with the U.S. this week. Reuters also reported that Iran is "positively" considering negotiations with the U.S.

However, the atmosphere in Iran is somewhat different.

Esmail Baghaei, spokesperson for the Iranian Ministry of Foreign Affairs, responded to a question about participating in a second round of negotiations at a press briefing today, stating, "As of this moment, no plans or decisions have been made regarding the next negotiations."

Iran's semi-official Tasnim news agency reported, "There has been no change in Iran's decision not to participate in negotiations so far," adding, "Iran's participation depends on the fulfillment of certain preconditions." Iran's position is that the U.S. lifting the blockade of the strait must be a prerequisite.

WTI, reflecting these combined factors, also fell to $87.02 during trading.

Nikos Tsavuras, a market analyst at Trado, a commodity brokerage, predicted, "Currently, the strait is under a dual blockade. These factors could push oil prices higher, and even if the situation is resolved, it will be difficult for supplies to normalize in the short term, so prices are unlikely to return to pre-war levels."

Frank Monkam, Head of Macro Trading at Buffalo Bayou Commodities, a commodity trading firm, stated, "The gap between the two sides in creating a practically workable agreement framework remains quite large. If tensions escalate again after the ceasefire expires, there could be room for the market to build additional long positions."