Oil prices climbed and Bitcoin gained ground on Monday as the US began enforcing a naval blockade on vessels entering or exiting Iranian ports, escalating geopolitical risks in the Persian Gulf following the collapse of weekend peace talks.
Brent crude oil futures gapped higher at the open, trading just under $101 a barrel, after closing at $95.20 on Friday. By 14:45UTC the international benchmark stood around $100.50, up more than 5% since Friday's close as traders weighed potential further disruptions to energy flows. The US restrictions took effect at 15:00UTC and target ships linked to Iranian ports.
Bitcoin climbed around 1.5% on the day to about $71,900. The largest cryptocurrency by market value frequently attracts flows during periods of geopolitical uncertainty as investors seek assets detached from traditional financial systems.
Broader equities showed mixed performance. At 14:45UTC, the S&P 500 had slipped 0.1% since the open, the Dow Jones Industrial Average fell 0.6%, and the Nasdaq Composite was virtually flat. This uneven movement reflected shifting risk sentiment amid rising energy costs and renewed inflation worries.
Diplomatic tensions persist
The action follows stalled negotiations over the weekend in Pakistan. President Donald Trump said he remained open to talks but warned the US could target remaining Iranian infrastructure, including water and power facilities.
US Central Command clarified that the blockade focuses on Iranian-linked traffic and would not interfere with vessels heading to non-Iranian ports. The UK and France indicated they would not participate. Both Washington and Tehran left the door open to diplomacy despite the escalation.
Iran warned that no port in the Persian Gulf or Sea of Oman would remain safe if its facilities faced threats, raising fears of wider disruption across vital shipping lanes.
The Strait of Hormuz – through which nearly one-fifth of global oil supply typically passes – has remained effectively constrained since the broader conflict began earlier this year. The latest move has intensified volatility in energy markets and stoked concerns over higher inflation and slower global growth.
Saudi supply buffer emerges
Saudi Arabia restored full capacity on its East-West oil pipeline to 7mn barrels per day on 12 Apr after recent attacks linked to the Iran conflict disrupted operations. The pipeline serves as a key export route amid ongoing issues in the Strait of Hormuz. However, OPEC data showed a sharp decline in output for March, led by declines in Saudi Arabia, Iraq, the United Arab Emirates and Kuwait.
