Satellite view of the Strait of Hormuz, a critical chokepoint for global energy supply, connecting the Persian Gulf to the Gulf of Oman.
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Oil prices rose on Sunday with U.S. crude topping $114 per barrel, after President Donald Trump gave Iran until Tuesday to open the Strait of Hormuz or face attacks on its power plants.
U.S. crude oil futures for May pared earlier gains to rise 0.5% at $112.08 per barrel at 9:28 p.m. ET. International benchmark Brent prices for June delivery also scaled back to 1.3%, trading at $110.47 per barrel.
Trump warned Sunday in an expletive-filled social media post that Iran would be “living in Hell” if they do not open the Strait. The president threatened to bomb the country’s power plants and bridges.
Trump subsequently posted “Tuesday, 8:00 P.M. Eastern Time!” without further explanation.
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Iran has effectively kept the Strait closed through attacks on oil tankers. The sea route connects the Persian Gulf to world markets. About 20% of global supplies passed through the Strait before the war.
The closure of the Strait has triggered the largest oil supply disruption in history. Crude, jet fuel, diesel and gasoline prices have surged since the war started.
Trump said in a national address last Wednesday that the war would continue for two or three weeks.
Nearly 1 billion barrels will be lost by the end of the month, comprising up to 600 million barrels of crude oil and roughly 350 million barrels of refined products, according to TD Securities.
“With the conflict now expected to last at least into deep April, the barrel math becomes increasingly grim,” said Ryan McKay, senior commodity strategist at TD Securities, in a Thursday note to clients.
Rapidan Energy sees a total net loss of 630 million barrels of oil and products by the end of June, when accounting for redirected flows through pipelines, emergency stockpile releases and inventory drawdowns.
The eight members of OPEC+ on Sunday agreed to increase production by 206,000 barrels per day in May, though it is unclear how the oil will reach the global market with the Strait still closed.
Kuwait Petroleum Corporation said Sunday that several of its operational facilities were attacked by drones, resulting in significant damage.
OPEC+ warned that repairing energy infrastructure damaged by Iranian attacks “is both costly and takes a long time, thereby affecting overall supply availability.”
The eight members of OPEC+ are Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria and Oman.
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