Oil prices extend gains as US-Iran war deadlock keeps supply off market

• Brent crude futures gained 1.62% to $119.94/barrel (ninth consecutive day of increases), while WTI rose 0.59% to $107.51/barrel, following gains of over 6% in the previous session
• Iran has blocked most shipping through the Strait of Hormuz—a critical global energy chokepoint—since U.S.-Israeli airstrikes began on February 28, 2026, with thousands killed and no near-term resolution expected
• The UAE's exit from OPEC effective May 1 and a planned modest OPEC+ output increase of 188,000 bpd are unlikely to materially affect tight supply conditions, as Gulf producers will take months to restore pre-war production volumes

Oil Prices Surge on Extended US-Iran Conflict and Supply Disruptions

Key Price Movements:

Oil prices continued their rally on April 30, with Brent crude futures rising 1.62% to $119.94 per barrel—marking a ninth consecutive daily gain. The more active July contract traded at $111.38, up 0.85%. WTI crude climbed 0.59% to $107.51 per barrel, gaining in eight of nine sessions. Both benchmarks posted substantial gains in the previous session, with Brent up 6.1% and WTI up 7%.

Conflict Status:

Talks to end the U.S.-Israeli war against Iran have reached a deadlock, with no near-term resolution in sight. Iran has largely blocked all non-Iranian shipping through the Strait of Hormuz—a critical global energy chokepoint—since U.S. and Israeli airstrikes began on February 28. The U.S. initiated a blockade of Iranian ships in April, with President Trump meeting oil companies Wednesday to discuss managing a potentially months-long disruption.

Supply Implications:

Analysts describe this as "the world's biggest energy disruption ever," with thousands killed and regional supply severely constrained. OPEC+ is expected to approve a modest output increase of approximately 188,000 barrels per day at Sunday's meeting.

UAE OPEC Exit:

The United Arab Emirates' departure from OPEC, effective May 1, is expected to undermine the group's price control capabilities. However, Wood Mackenzie analysts note Gulf countries, including the UAE, "will take months to return to pre-war production volumes," limiting near-term supply relief amid the Hormuz closure and war-related disruptions.

Market Outlook:

With the Strait of Hormuz blockade continuing and diplomatic efforts stalled, supply constraints appear likely to persist, supporting elevated oil prices.