31JUL

Oil surges past $103 on blockade

3 min read

09:44UTC

Brent crude jumped 8% past $103 on Monday, reversing the post-ceasefire drop and making Goldman Sachs's $120 Q3 severe scenario the operative frame.

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Key takeaway

Goldman Sachs's $120 severe scenario is now the operative frame, not the tail risk.

Brent Crude surged 8% above $103 on the blockade announcement, reversing the post-ceasefire drop that had taken prices to $92.21 . Goldman Sachs had cut its Q2 Brent forecast to $90 after the ceasefire was announced. The blockade made that forecast obsolete within a day. Goldman's severe scenario, $120 by Q3, is now the operative frame rather than the tail risk .

Approximately a dozen Iranian supertankers carrying an estimated $2.4 billion of crude sit stationary in the Gulf of Oman, caught between CENTCOM's blockade from one side and Iran's own mine and vetting regime from the other . The $2.4 billion figure derives from operational analysis rather than wire-service confirmation. 325 tankers remain stranded in the Gulf. Hormuz traffic, which had climbed to 17 transits by Saturday, dropped to near zero when enforcement started ¹. 20,000 sailors aboard roughly 2,000 vessels are stranded.

Saudi Arabia has insulated itself: its Petroline pipeline, restored to full capacity, now routes all exports via the Red Sea, bypassing Hormuz. That protects Riyadh's revenue but does nothing for the 21 million bpd that normally transits the strait .

Deep Analysis

In plain English

Oil prices shot up sharply on Monday when the blockade was announced. Brent crude , the international benchmark for oil pricing , jumped 8% above $103 per barrel. For context, it had fallen to $92 after the ceasefire last week. Why does this matter to you? Oil prices feed into fuel prices at petrol stations, heating costs, and the cost of transporting goods. When oil goes up, almost everything gets slightly more expensive with a delay of a few weeks. Goldman Sachs, one of the world's largest banks, had previously predicted oil could reach $120 in the worst case. Before Monday, that seemed unlikely. Now analysts say it is possible without anything further going wrong.

What could happen next?

Consequence
April CPI will layer blockade-driven fuel costs on top of March's 0.9% monthly rise , the largest since 1967 , creating a two-month compounding effect that central banks cannot offset without rate rises that would further damage consumer confidence.
Short term · 0.85
Risk
If Goldman's $120 scenario materialises, US Federal Reserve rate policy is constrained: cutting rates to support the economy while inflation is energy-driven would be politically untenable, forcing a stagflationary choice between growth and price stability.
Medium term · 0.72
Opportunity
Saudi Arabia, now exporting via Petroline and insulated from Hormuz disruption, benefits from elevated prices without the supply constraint , strengthening Riyadh's fiscal position and reducing its incentive to mediate a Hormuz resolution.
Short term · 0.8

Source Landscape

This story draws on neutral-leaning sources from United States (includes United States state media)

United States

Primary parallel: The 1973 Arab oil embargo sent Brent's predecessor from $3 to $12 in under three months , a 300% rise , by restricting supply to specific countries. The 2026 shock mechanism is different: not country-targeted embargo but physical chokepoint closure.

The closer structural parallel is the 1967 Suez Canal closure, which added 5,000 miles to tanker routes and created a sustained 18-month freight premium rather than a sharp price spike. The Hormuz closure is structurally more severe than Suez because there is no bypass route for most Gulf producers.

Counter-parallel: The 2019 Abqaiq drone strikes on Saudi Arabia's largest crude processing facility briefly cut global supply by 5 million bpd and sent Brent up 15% in a single session , but prices recovered to pre-strike levels within 10 days as Saudi Aramco restored capacity. The 2026 disruption has no equivalent restoration mechanism: the Hormuz Chokepoint is not a facility that can be repaired.

The $103 level represents the second structural repricing in 45 days. The first came at war's outbreak (from $82 to $95); the post-ceasefire correction fell to $92.21; Monday's blockade announcement recovered and exceeded the war-onset high.

At $103 Brent, the transmission to consumer prices is: UK average petrol prices rise approximately 2-3 pence per litre per $10 Brent move, with a 10-14 day lag. A sustained $103-110 range would add 2-4p per litre within a fortnight. Diesel, which powers UK goods transport, tracks more closely and faster.

The 325 stranded tankers represent an inventory overhang: when the blockade eventually resolves, that trapped crude will reach markets simultaneously, potentially creating a brief price collapse before the supply structure normalises. Goldman's $120 scenario assumes the blockade sustains through Q3; if it breaks in May, spot prices could fall sharply even as structural damage to tanker routing persists.

Consensus view: Goldman Sachs commodities research (head of global commodities Daan Struyven) and Citigroup's Ed Morse both assess the $103 level as the market's recalibration from 'stalemate' to 'active blockade' pricing.

The $8 single-session move is consistent with the range Goldman assigned to a blockade scenario in its 9 April note, which set $120 as the Q3 severe case. Before the blockade, that was a tail-risk scenario. Now, as Struyven noted, it requires no further escalation to reach.

Counter-view: The Oxford Institute for Energy Studies (OIES) argues that $120 is not a base case regardless of the blockade, because Saudi Arabia's Petroline restoration to 7 million bpd context; Petroline event in skeleton and UAE's ADCO pipeline capacity provide a partial Hormuz bypass. OIES's Bassam Fattouh calculates that non-Hormuz-dependent Gulf export capacity sits at roughly 9 million bpd , enough to satisfy most of Europe's needs but leaving Asia-Pacific exposed.

Key tension: Whether the oil market is pricing a supply shock (shortage of physical barrels) or a risk premium (uncertainty about supply even if some barrels reach market) , the two require different policy responses and have different price-duration profiles.

Sources:CENTCOM / Al Jazeera·CENTCOM / Al Jazeera·Goldman Sachs via Invezz

Mentions:Barrels Per Day →Brent Crude →Goldman Sachs →Daan Struyven →Iran →Saudi Aramco →Riyadh →Saudi Arabia →Red Sea →Oman →Prima →Gulf of Oman →Citigroup →United Arab Emirates (UAE) →Consumer Price Index →CENTCOM (US Central Command) →

First Reported In

Update #67 · Trump blockades Iran on a tweet

CENTCOM / Al Jazeera· 13 Apr 2026

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Causes and effects

Caused by

Brent holds at $95 as markets wait

Brent at $95-97 on 11-12 April jumped 8% past $103 as the blockade announcement repriced markets from stalemate to active escalation.

Occurred 12 Apr 2026

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Brent's biggest single-day drop since 1991 Gulf War

Brent's post-ceasefire drop to $92.21 (ID:2115) was fully reversed and exceeded by the blockade-triggered surge to $103+.

Occurred 8 Apr 2026

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This Event

Oil surges past $103 on blockade

Energy markets have repriced from structural stalemate to active escalation on the blockade announcement, compounding March inflation data that already showed the largest monthly CPI rise since 1967.

Led to

Meloni breaks European line to the Gulf

Brent's 8% blockade-day surge past $103 (ID:2286) is the direct driver of European fiscal emergency responses and Italy's Gulf energy diplomacy documented in this event.

Occurred 13 Apr 2026

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Brent at $94.79: markets price the gap

Brent's $94.79 close on 14 April is the market partial-recovery after the $103 blockade-day spike on 13 April, reflecting priced partial enforcement.

Occurred 14 Apr 2026

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Different Perspectives

Spain's LNG terminal operators

Spain's 9,145 GWh terminal inventory is the largest single stock in the EU LNG network, an option value that can reroute cargoes wherever the winter strip pays best rather than a cavern gas obligation tied to a fixed date. That flexibility matters more as Germany's cavern shortfall pushes more of the winter security question onto import infrastructure.

European Commission

Brussels holds the bloc to 90% on a flexible window while Germany, holding roughly a quarter of EU storage capacity, tracks toward missing its own lower 80% figure by 21 points. A national shortfall this size in the anchor market matters more to bloc security than the flexible timetable alone can absorb.

French power exporters and CRE

French day-ahead rose in step with Germany but by less, reopening a EUR 7-17 premium that makes northward export flows commercially attractive again after the EUR 43.09 discount evaporated in days. CRE separately authorised RTE and Enedis to buy flexibility locally, betting the coming winter's binding constraint is grid congestion rather than a shortage of firm capacity.

TTF trading desk

A visible national shortfall like Germany's 21-point gap is a directional signal, not noise, for a desk holding the summer-winter spread. TTF's flat EUR 58-60 range through this week's German price swings says the market has not yet chosen to reprice refill risk into the front of the curve.

German cavern and CCGT operators

German caverns kept buying prompt gas at TTF near EUR 58-60 through the inversion; the wind collapse to 2.4 GW then flipped the spark spread to plus EUR 29 and put turbines back in the same queue. Every day turbines win that bid, injection at a third of the 877 GWh/day pace needed falls further behind.

Slovakia

Slovakia says it dropped its hold-out on the 21st sanctions package only after Ursula von der Leyen personally signed written gas-price and supply guarantees. The Council of the European Union's own 17,238-character release on the package names neither Slovakia nor any guarantee, leaving Bratislava's account unconfirmed by the institutional record.