LONDON, April 20, 2026, 09:38 BST
Oil came roaring back Monday, clawing back much of Friday’s losses after the U.S. seized an Iranian vessel and markets grew wary of deepening U.S.-Iran tensions. Brent, the international crude standard, surged more than 6% to trade around $95.9 a barrel. U.S. West Texas Intermediate hovered close to $89.3.
Hormuz is back in focus for the oil market—a big deal, considering the strait typically carries around 20% of global oil flows. Tastylive’s Ilya Spivak flagged a surge in “war trade” activity, fueling inflation expectations, U.S. yields, and the dollar. Reuters
Tanker traffic has become traders’ main focus, with ship tallies monitored nearly every hour. For Bob Savage, who leads markets macro strategy at BNY, the true indicator isn’t what’s coming out of Washington or Tehran, but how many vessels are actually passing through Hormuz.
Charu Chanana, chief investment strategist at Saxo, said the latest weekend escalation has brought back the market’s “geopolitical risk premium”—that added cost investors swallow for war threats—right when some traders were starting to factor in a “peace dividend.” On the currency side, the dollar hit its highest in a week while crude jumped. Reuters
Some activity, but little relief. Kpler data tracked over 20 ships transiting Hormuz on Saturday—the heaviest traffic since March 1. Still, reports came in of gunfire targeting at least two merchant vessels during the passage. Shipping data indicated the tanker Odessa later cleared the strait, setting course for South Korea’s HD Hyundai Oilbank.
Diplomatic options appeared limited. Iranian President Masoud Pezeshkian called for exploring all rational avenues to ease tensions, but cautioned that suspicion toward Washington is still warranted. Over in Beijing, China’s foreign ministry pressed parties to steer clear of escalation and push for a return to normal transit.
On the supply front, sentiment didn’t budge. “Market fundamentals are getting worse,” Sparta Commodities analyst June Goh said, pointing to 10 to 11 million barrels per day of crude still shut in or offline. SEB Research’s Bjarne Schieldrop flagged signs of a weakening physical market, with longer shipping routes and pricier freight and insurance pinching flows. Reuters
But that rebound looks fragile. Should diplomacy pick up or shipping conditions return to normal, the gains could vanish quickly. Brent ended Friday down 9.07% after Iran announced it would allow commercial ships to pass through the waterway during the ceasefire period. Gelber & Associates noted the market had started to shake off an “extreme risk premium.” Reuters
Producers and refiners aren’t getting a breather just yet. Saudi Arabia, the UAE, Iraq, and Kuwait have made it clear: they won’t be able to ramp up exports until tankers can move freely through the strait, without disruptions. Unless that shipping lane stays reliably open for more than a day or two, oil prices could stay on edge.
