Oil prices experienced an increase once more on Wednesday, marking the continuation of their recent rally for an eighth consecutive day. This rise follows reports indicating that the U.S. intends to maintain its blockade of Iranian ports, a strategy that may prolong supply disruptions originating from the Middle East. A report late Tuesday, referencing U.S. officials, indicates that President Donald Trump has instructed aides to make preparations for a prolonged blockade of Iran. The report indicated that Trump plans to continue exerting pressure on Iran’s economy and oil exports through the imposition of restrictions on shipping activities to and from its ports. Brent crude futures for June increased by 52 cents, or 0.47%, reaching $111.78 a barrel at 0154, marking the eighth consecutive day of gains. The June contract is set to expire on Thursday, while the more actively traded July contract stands at $104.84, reflecting an increase of 0.4%. U.S. West Texas Intermediate futures for June increased by 57 cents, or 0.57%, reaching $100.50 a barrel following a 3.7% gain in the prior session, marking an upward trend for seven of the last eight days.

Moreover, the exit of the UAE, a key player within OPEC, may introduce additional volatility to the oil markets. The UAE, in conjunction with Saudi Arabia, stands out as one of the limited producers possessing significant spare capacity to aid in stabilizing prices amid supply disruptions. Trump indicated that Iran has requested the United States to remove the naval blockade of the strait as both parties engage in negotiations aimed at concluding hostilities that have significantly impacted energy supplies from the area. The Strait of Hormuz has remained predominantly inaccessible since hostilities commenced in late February, resulting in elevated energy prices due to diminished flows of crude oil, natural gas, and refined products. The International Energy Agency has characterized the current circumstances as the most significant supply shock ever recorded, heightening concerns regarding a potential new inflation crisis.

Despite the implementation of a ceasefire since early April, tensions persist between the U.S. and Iran regarding the ongoing peace negotiations. As reported on Tuesday, citing sources familiar with the negotiations, that mediators anticipate Iran will present a revised proposal to conclude the conflict in the coming days. Trump stated on Truth Social that Tehran seeks to reopen the crucial oil shipping route “as soon as possible, as they try to figure out their leadership situation.” Goldman Sachs has adjusted its projections for fourth-quarter oil prices, now anticipating $90 per barrel for Brent crude and $83 for WTI, attributing this revision to a decrease in output from the Middle East. According to a report, Goldman Sachs analysts indicate that the economic risks exceed what is suggested by the crude base case alone. This is attributed to the net upside risks to oil prices, unusually high refined product prices, potential product shortages, and the unprecedented scale of the shock.

A note from Haitong Futures, as reported, suggests that the ongoing ceasefire phase is increasingly indicative of preparations for additional conflict. It noted that should U.S.-Iran discussions not achieve significant advancement by the conclusion of April and hostilities recommence, oil prices may escalate to new peaks for the year. Macquarie anticipates that crude prices could stay buoyed within the $85 to $90 range in the short term, with a gradual ascent toward $110 as supply conditions enhance. It also cautioned that extended disruptions through April could elevate Brent to as much as $150 per barrel. Nuvama Institutional Equities indicated that a prolonged closure of the Strait of Hormuz, responsible for approximately 20 million barrels per day, could elevate crude prices to the range of $110 to $150.