Iran's Khamenei vows pressure on U.S. and Israel via Hormuz Strait
Iran’s new supreme leader, Ayatollah Ali Khamenei, reaffirmed plans to pressure the United States and Israel by keeping the Hormuz Strait in play, signaling a hard line after his formal elevation to the role. In a national TV address, he described using Hormuz as a “lever” and indicated a willingness to widen a conflict by pursuing a “second front.” The rhetoric came as oil markets jumped on fears of a broader confrontation in the Middle East.
The immediate market reaction was sharp. On the ICE futures market, Brent crude for May delivery closed up 9.2 percent at $100.46 a barrel. It marked the first close above $100 since August 2022. U.S. West Texas Intermediate for April delivery rose 9.7 percent to $95.73 a barrel. The move underscored investors’ worries that the Hormuz chokepoint could remain blocked or vulnerable to disruption as tensions escalate.
The International Energy Agency warned that the conflict in the Middle East is causing what it called the largest disruption to global oil supply in modern history. It noted a drastic reduction in crude and refined products moving through Hormuz, a channel that accounts for about 20% of the world’s oil shipments. The IEA’s assessment came as markets absorbed the impact of ongoing hostilities in the region.
In a separate development, the U.S. government said it would not rely solely on price signals to stabilize markets. It reaffirmed plans to release 400 million barrels of emergency oil from the Strategic Petroleum Reserve, though the impact of the SPR release on prices has been limited so far.
U.S. policy actions also extended to sanctions-related flexibility. The Treasury Department’s Office of Foreign Assets Control issued a general license allowing the sale of Russian crude and oil products loaded before a specified date to proceed through April 11. The license is narrow and applies only to already in-transit cargoes, aiming to prevent a sudden loss of Russian supply while maintaining broader sanctions pressure.
Meanwhile, the Department of Energy said it would begin a staged release of 172 million barrels of SPR crude over roughly 120 days to support domestic energy markets amid the heightened volatility. The objective is to help cushion U.S. gasoline and energy costs as concerns about supply security persist.
Why this matters for the United States. If Hormuz remains chokepointed or exposed to further disruption, global oil prices can stay elevated, feeding higher gasoline and energy costs in the United States. That, in turn, affects inflation, consumer spending, and transportation costs for businesses and households. The developments also influence U.S. energy diplomacy and allied security calculations in the Middle East, as well as the reliability of global energy supply chains that feed into technology production, manufacturing, and international markets. For markets and policymakers, the situation underscores how events in a volatile region can quickly ripple through prices, inflation expectations, and strategic stockpiles in the United States.