WS Investor
29 Apr 2026, 19:32
Brent Crude Surges to Four-Year High Above $116 as Hormuz Crisis Deepens and US Stockpiles Plunge
Brent crude oil surged to its highest level since June 2022, topping $116 per barrel and extending a remarkable eight-session winning streak, as a confluence of supply shocks — a closed Strait of Hormuz, a surprise plunge in US crude stockpiles, and a fracturing OPEC — pushed energy markets to their most extreme levels in years, according to Trading Economics.
The immediate catalyst driving leg higher was the EIA's weekly inventory report, which showed US commercial crude stocks falling by 6.2 million barrels in the week ending April 24 — far exceeding the modest 0.3 million barrel draw analysts had forecast and reversing the prior week's 1.925 million barrel build. Brent jumped $5.43 on the day to $116.70 per barrel by mid-morning in New York, per OilPrice*com, while WTI advanced $4.65 to $104.60.
The broader driver, however, is the ongoing closure of the Strait of Hormuz — now in its ninth week — which has effectively halted roughly 20% of global oil flows, triggering what the International Energy Agency has described as the largest supply shock on record, per Trading Economics. Diplomatic efforts remain deadlocked. President Trump this week rejected Iran's latest proposal, which offered to reopen the strait in exchange for the US lifting its naval blockade, while leaving Tehran's nuclear programme off the table. Washington signalled it is preparing additional measures, including potential sanctions on Chinese refiners handling Iranian crude and on countries paying transit fees for Hormuz passage.
A notable structural shift is also unfolding within OPEC itself. The UAE announced it will exit the cartel next month to gain greater flexibility in adjusting its production — a move that adds another layer of uncertainty to global supply governance at precisely the moment markets need clarity most, per Trading Economics.
Adding to the complexity of pricing, the EIA highlighted in a recent analysis that Dated Brent spot prices have surged to a premium of more than $25 per barrel over front-month futures contracts — an extreme level of backwardation reflecting immediate physical market tightness, as buyers scramble to secure supply to replace barrels that would ordinarily transit the Strait of Hormuz, per EIA. Under normal conditions, this spread is narrow. The current divergence signals that the supply crunch is acute in the near term, even as futures markets attempt to price in an eventual resolution.
Fortune noted that Brent is now trading approximately $50 per barrel above where it stood a year ago — a staggering year-on-year move that is feeding directly into global inflation and complicating the policy calculus for central banks meeting this week, including the Federal Reserve and the ECB. With US Q1 GDP data due tomorrow and no diplomatic breakthrough in sight, energy markets are unlikely to find relief in the near term.
Brent crude oil surged to its highest level since June 2022, topping $116 per barrel and extending a remarkable eight-session winning streak, as a confluence of supply shocks — a closed Strait of Hormuz, a surprise plunge in US crude stockpiles, and a fracturing OPEC — pushed energy markets to their most extreme levels in years, according to Trading Economics.
The immediate catalyst driving leg higher was the EIA's weekly inventory report, which showed US commercial crude stocks falling by 6.2 million barrels in the week ending April 24 — far exceeding the modest 0.3 million barrel draw analysts had forecast and reversing the prior week's 1.925 million barrel build. Brent jumped $5.43 on the day to $116.70 per barrel by mid-morning in New York, per OilPrice*com, while WTI advanced $4.65 to $104.60.
The broader driver, however, is the ongoing closure of the Strait of Hormuz — now in its ninth week — which has effectively halted roughly 20% of global oil flows, triggering what the International Energy Agency has described as the largest supply shock on record, per Trading Economics. Diplomatic efforts remain deadlocked. President Trump this week rejected Iran's latest proposal, which offered to reopen the strait in exchange for the US lifting its naval blockade, while leaving Tehran's nuclear programme off the table. Washington signalled it is preparing additional measures, including potential sanctions on Chinese refiners handling Iranian crude and on countries paying transit fees for Hormuz passage.
A notable structural shift is also unfolding within OPEC itself. The UAE announced it will exit the cartel next month to gain greater flexibility in adjusting its production — a move that adds another layer of uncertainty to global supply governance at precisely the moment markets need clarity most, per Trading Economics.
Adding to the complexity of pricing, the EIA highlighted in a recent analysis that Dated Brent spot prices have surged to a premium of more than $25 per barrel over front-month futures contracts — an extreme level of backwardation reflecting immediate physical market tightness, as buyers scramble to secure supply to replace barrels that would ordinarily transit the Strait of Hormuz, per EIA. Under normal conditions, this spread is narrow. The current divergence signals that the supply crunch is acute in the near term, even as futures markets attempt to price in an eventual resolution.
Fortune noted that Brent is now trading approximately $50 per barrel above where it stood a year ago — a staggering year-on-year move that is feeding directly into global inflation and complicating the policy calculus for central banks meeting this week, including the Federal Reserve and the ECB. With US Q1 GDP data due tomorrow and no diplomatic breakthrough in sight, energy markets are unlikely to find relief in the near term.