Oil prices surged sharply as the United States announced plans to begin a naval blockade of Iranian ports starting Monday, escalating tensions in the region and raising concerns over global oil supplies. The move comes after recent talks between Washington and Tehran failed to produce an agreement to end the ongoing conflict, putting a fragile two-week ceasefire at risk.

Brent crude futures climbed more than 7% to over $102 per barrel during early trading, while U.S. West Texas Intermediate crude also rose by roughly 7.5%, surpassing $103 per barrel. The jump in oil prices reflects growing market fears about disrupted exports from Iran, a key oil producer, amid heightened military and political uncertainties.

U.S. President Donald Trump announced the blockade on Sunday, stating that the U.S. Navy would begin restricting maritime traffic to and from Iranian ports via the strategically vital Strait of Hormuz. The Strait is a crucial chokepoint for global oil shipments, with a significant portion of the world’s oil passing through it daily. The U.S. Central Command said the blockade would be enforced impartially against all vessels entering or departing Iranian coastal areas, including those in the Arabian Gulf and Gulf of Oman. However, U.S. officials emphasized that ships transiting the Strait to and from non-Iranian ports would not be impeded.

The decision to impose the blockade reflects a significant shift following earlier hopes that the ceasefire would allow free navigation through the Strait. Analysts have noted that this action signals the U.S. assessment that reopening the Strait under current conditions is no longer viable. Some market experts have highlighted a widening gap between futures prices and physical crude oil prices, with certain physical grades commanding premiums near $150 per barrel amid supply concerns.

Iranian authorities, particularly the Revolutionary Guards, have strongly condemned the U.S. move, warning that any military vessels approaching the Strait of Hormuz would be treated as violations of the ceasefire and met with decisive force. Shipping data showed that some supertankers had already begun avoiding the Strait in anticipation of the blockade, although a few fully laden vessels passed through shortly before the announcement.

Meanwhile, Saudi Arabia reported restoring full capacity to its East-West pipeline, reaching about 7 million barrels per day. This development follows damage assessments of its energy infrastructure from recent attacks linked to the regional conflict. Saudi efforts to stabilize its oil output come as markets continue to react to the volatile situation surrounding Iranian exports.

The United States indicated oil prices could remain elevated through the upcoming U.S. midterm elections in November, linking the blockade and military actions to potential longer-term political and economic repercussions. While market reactions have been significant, the blockade introduces additional uncertainties in an already tense geopolitical landscape that continues to influence global energy prices.