Crude Oil: Strait of Hormuz — The Lifeline and Powder Keg of Global Oil Prices

The crude oil market experienced a historic surge in early April. International Brent crude futures closed at $109.24 per barrel, XTI crude futures at $112.06 per barrel, with XTI soaring by 11.93% at one point, even showing an abnormal phenomenon where XTI prices exceeded Brent, reflecting a severe supply crunch. A month ago, Goldman Sachs' forecast for the 2026 Brent average price was only $56, and JPMorgan Chase's was even lower at $53 — now Brent has surpassed $109, with a monthly increase of about 43%. Goldman Sachs has significantly raised its forecast, adjusting the 2026 Brent average price from $77 to $85 per barrel, and XTI from $72 to $79 per barrel, expecting high oil prices to persist long-term.

The core driver of the oil price surge is the escalation of geopolitical conflicts in the Middle East. On April 2, Trump delivered a nationwide speech without providing a ceasefire timetable, instead threatening Iran, stating that if no agreement is reached, the U.S. will continue to strike Iran’s energy facilities and impose sanctions on Iranian oil. Trump even encouraged countries to "grab oil" through the Strait of Hormuz and claimed that "when the Iran conflict ends, the strait will naturally reopen." Iran emphasized that the Strait of Hormuz is under its "full control" and reiterated that blocking the strait is a countermeasure. If the disruption of the Strait of Hormuz extends to 10 weeks, Brent crude prices could break the 2008 record of $147. However, there are signals of easing — on April 3, multiple parties confirmed a ceasefire and peace negotiations, causing Brent futures in Europe to drop over 8% at one point, temporarily removing the geopolitical risk premium of about $10 to $15 per barrel. But after Iran refused to meet in Islamabad, negotiations once again stalled. China Galaxy Securities expects Brent prices in April to fluctuate around $100, with short-term volatility increasing due to geopolitical uncertainties.