EIA forecasts prolonged Strait of Hormuz closure could push oil prices $20 higher amid OPEC output hitting two-decade lows.
West Texas Intermediate crude jumped over 3% to $98.38 per barrel Tuesday as escalating US-Iran tensions threaten supply routes. The rally follows warnings of prolonged disruptions through the Strait of Hormuz, a critical chokepoint for global oil trade.
The US Energy Information Administration projected the strait may remain closed until late May, with gradual reopening extending into 2026. If closures persist through June, the EIA cautioned prices could rise an additional $20 per barrel. OPEC output in April fell to its lowest level in over 20 years, according to a Reuters survey.
Negotiations between Washington and Tehran remain stalled, with President Trump describing the ceasefire as fragile. Iran has expanded its operational control over the strait’s width to 200-300 miles, raising further supply concerns.