Oil prices experienced a modest rebound at the start of the week, with WTI crude for June delivery settling at $95.4 per barrel (up $0.61 or 0.6% on Friday) and Brent crude for July delivery at $101.3 per barrel (up $1.23 or 1.23% on Friday). However, both benchmarks posted their largest weekly declines since April 2026, each falling 6.4% over the week, as renewed US-Iran tensions in the Strait of Hormuz kept supply-risk premia in focus [1]. WTI futures on NYMEX surged 5.2% to near $96.60 in Asian trade at the start of the week, as hopes for a US-Iran ceasefire faded after US President Donald Trump called Iran’s response to a peace proposal 'totally unacceptable' on Truth Social [2][3][4].
Tehran, according to Iranian state media and CNN, is demanding recognition of its authority near the Strait of Hormuz, compensation for war damages, the release of frozen assets, and the lifting of sanctions. The Strait of Hormuz is a vital passage for nearly 20% of global energy supply, and the deadlock has prompted fears of a prolonged closure, further supporting oil prices [2][3]. President Trump’s rejection of Iran’s terms and the ongoing military exchanges have dashed hopes for a near-term resolution, with Israeli Prime Minister Benjamin Netanyahu stating the war with Iran is 'not over' [4].
The rise in oil prices has had significant market implications. The US Dollar strengthened, with the Dollar Index (DXY) up 0.3% to near 98.10, while the Indian Rupee slumped 0.8% against the US Dollar to near 95.20, as higher oil prices pressured oil-importing economies like India. The Reserve Bank of India reportedly intervened to support the Rupee, and Indian Prime Minister Narendra Modi urged the public to reduce fuel consumption and non-essential imports to conserve forex reserves [3]. Foreign Institutional Investors continued to sell Indian equities amid the absence of a breakthrough in US-Iran negotiations [3].
In Asia, market reactions were mixed: South Korea’s Kospi reached a new record, while other regional markets and US/European futures remained muted. In the UK, the Pound faced pressure amid political uncertainty, and in China, April’s consumer and producer inflation exceeded expectations as the Middle East conflict drove commodity costs higher. Export growth in China also accelerated as buyers sought to stockpile components, fearing further cost increases due to the Iran war [4].
Saudi Aramco reported a 26% year-on-year jump in first-quarter profits, beating analyst forecasts, as a key pipeline bypassing the Strait of Hormuz reached full capacity, highlighting the strategic importance of alternative supply routes amid the ongoing conflict [4].
Technical analysis indicates WTI’s near-term bias has turned bullish, with prices above the 20-day EMA at $95.39. The Relative Strength Index at 52.45 suggests modest positive momentum. As long as WTI holds above the 20-day EMA, buyers are likely to retain control, with potential upside targets at $100 and the April 30 high of $107.35 [2].
CONCLUSION
The US-Iran standoff over the Strait of Hormuz has reignited supply concerns, driving oil prices higher after last week’s steep declines. The market impact is significant, affecting currencies, equities, and inflation expectations globally, especially in oil-importing economies. With no resolution in sight, volatility in energy and related markets is likely to persist.