Brent crude climbs 3% to $94 — Trump's Iran demands put Hormuz risk back in play

What's driving the move

Monday's catalyst is straightforward: the geopolitical risk premium is back. According to multiple news agencies, President Trump returned the proposed Iran peace framework to negotiating teams with demands for clearer and more binding language around Iran's nuclear program. That means a swift normalization of shipping traffic through the Strait of Hormuz — which markets had at times priced in — is now far more uncertain.

The context is critical: during the military escalation phase in 2026, 90–95% of normal traffic through the strait was rerouted. Brent surpassed $120/bbl at the most acute stage, according to Wood Mackenzie economist Peter Martin, who in May 2026 described a prolonged closure as "the greatest single risk" to both energy markets and the global economy — stressing it would be "far more than an energy crisis."

The structural vulnerability is well documented: Saudi Arabia can reroute roughly one-fifth of its daily exports via the East-West Pipeline to Yanbu on the Red Sea. The UAE can reroute around half via the Habshan-Fujairah pipeline to the Gulf of Oman. Combined estimated unused bypass capacity: 3.5 mb/d — against the 20 mb/d that normally transits the strait. The gap is enormous.

The IEA has warned that physical shortfalls "will develop rapidly" if a disruption persists, and that oil prices could potentially reach $200/bbl by end-2026 under a prolonged closure scenario, as inventories are drawn down and demand falls by an estimated 6%.

For LNG, the situation is even more fragile: Qatar's and the UAE's LNG exports, which together account for nearly 20% of global LNG trade, have no alternative export routes. QatarEnergy declared force majeure on all LNG deliveries during the acute escalation phase earlier in 2026. A shock of that magnitude could knock more than 300 mcm/day off global LNG supply, according to IEA estimates.

In currency markets, the dollar is strengthening modestly on safe-haven demand, which would normally dampen some of the oil rally in non-USD-denominated markets — but the geopolitical premium is overshadowing that effect on Monday morning.

Key figures

Commodities overview

Oil

Brent crude opens the week with its strongest single-day gain in several weeks. WTI is moving in lockstep, and the spread between the two benchmarks holds steady at around $3.36 — within normal range, suggesting markets are not yet pricing in dramatic logistical disruptions, but rather a gradual increase in risk.

Oil equities and the energy sector in Europe are expected to open higher, with particular focus on integrated companies with Gulf exposure. Refinery margins could come under pressure in the medium term if crude supply tightens, while product prices (gasoline, diesel) are already elevated.

Natural gas and LNG

European TTF gas futures warrant close attention: Qatar is Europe's most important LNG supplier and all exports transit Hormuz. Any new force majeure situation will hit a European LNG market already operating with limited storage flexibility heading into the summer season. Henry Hub in the US is more insulated, but export LNG via Freeport and Sabine Pass could experience demand pressure.

Gold

Gold is trading with marginal gains as expected in a risk-off regime — classic safe-haven demand. Oil-driven inflation fears are a near-term positive for precious metals.

Technical picture

Brent crude breaks through the resistance level around $92–93/bbl on Monday, which marked the top of the previous consolidation channel. The next technically significant resistance lies around $97–98/bbl, followed by the psychological level at $100.

On the downside, support is now established at $90/bbl (former resistance, now support — a classic flip), with deeper support at $86–87/bbl corresponding to the 50-day moving average on the weekly timeframe.

RSI (14-day) is crossing above 60 from neutral territory — neither oversold nor overbought. That leaves technical room for further upside without immediate risk of a purely technical pullback.

Term structure: front-month backwardation has widened, reflecting that markets are now pricing spot supply as tighter than future deliveries. This is a classic geopolitical risk signature.

"The greatest single risk to both energy markets and the global economy" — Peter Martin, Wood Mackenzie, on a prolonged Hormuz closure (May 2026)

OI (open interest) in Brent futures on ICE will be critical to monitor throughout the day — a rise in OI combined with price gains confirms fresh long positioning rather than short-covering, and provides a stronger technical signal.

What to watch

Immediately ahead:

• Iranian responses to Trump's demands for revised deal language — will Tehran counter or harden its rhetoric?
• Hormuz shipping traffic data (Lloyd's List Intelligence, MarineTraffic): Has transit normalized, and what does Monday morning's data show?
• IEA monthly oil market report — the next edition will likely update scenario analyses for Hormuz exposure
• API and EIA weekly inventory data (Tuesday/Wednesday): A draw in US crude inventories will amplify the price rally; a surprise build could dampen it
• OPEC+ communications: If Gulf states see prices climb toward $95–100 with no resolution in sight, they may signal willingness to raise quotas — but physical capacity to deliver depends on Hormuz access

Price levels to watch:

• $97–98/bbl Brent: Technical resistance and a potential trigger for algo-driven short positioning
• $100/bbl: Psychological level — a break here would shift the narrative from "risk premium" to "new price trend" and draw broad media coverage
• $88/bbl: If positive Iran signals materialize, this is the first meaningful downside support
• $120/bbl: Crisis level from the acute Hormuz closure in 2026 — markets remember what is possible