Brent Oil Breaks Through $120 Mark, Strait of Hormuz Deadlock Continues to Ferment, How Will Trump’s Choice Sway Oil Price Direction?

TradingKey - Hopes for a resolution to the U.S.-Iran deadlock are fading, and the oil price rally continued during the Asian session. On Thursday, dampened by pessimistic news regarding peace talks, Brent crude futures for June delivery jumped over 4%, surmounting the $122 threshold to reach a new high since the start of the Iran war.

The U.S.-Iran conflict is approaching a critical 60-day milestone, with the developments over the next 48 hours drawing intense scrutiny. Under the U.S. War Powers Act, military action must terminate on the 60th day if the President has not received formal authorization from Congress, adding further uncertainty to an already tense situation.

According to reports, U.S. Central Command has requested the deployment of "Dark Eagle" hypersonic missiles to the Middle East. If approved, this would mark the first combat deployment of such missiles by the U.S., potentially for targeting ballistic missile launchers deep within Iranian territory.

General Brad Cooper, commander of U.S. Central Command, is scheduled to brief Donald Trump on Thursday regarding updated military action plans against Iran, with Chairman of the Joint Chiefs of Staff General Dan Caine also in attendance, according to people familiar with the matter. The briefing covers at least three options, sending a clear signal of geopolitical risk.

The first option involves "short and sharp" waves of strikes against Iranian infrastructure. The core strategy is to use limited military pressure to force Iran into showing greater flexibility on nuclear issues, thereby pushing for a resumption of negotiations.

The second option focuses on seizing partial control of the Strait of Hormuz to restore commercial shipping lanes. Sources say the operation could involve the deployment of ground troops, with a scale and complexity far exceeding a simple air strike.

The third option is a previously discussed special forces operation aimed at seizing Iran's highly enriched uranium stockpiles. This option directly targets the core of Iran's nuclear capabilities and carries extreme political and military sensitivity.

Notably, a military briefing itself does not equate to a final decision, but the timing and scale of this report send a powerful signal. General Brad Cooper previously provided a similar briefing to Trump on February 26; two days later, the U.S. and Israel launched a war against Iran. A person close to Trump stated that the earlier briefing had a substantive impact on Trump's final decision to go to war.

There were earlier reports that Trump is preparing a long-term naval blockade of Iran. Furthermore, several top executives from U.S. oil companies met with Trump at the White House to discuss how to mitigate the conflict's impact on American families, further fueling market anxiety.

If a long-term naval blockade is implemented, Iran is likely to retaliate by closing the Strait of Hormuz. A prolonged disruption of this waterway would lead to further global oil supply interruptions. Since Iran blocked the passage in late February, shipping through the Strait of Hormuz has nearly ground to a halt, cutting off approximately 20% of the world's oil supply.

However, Trump has been seeking assistance from other nations to form a new international coalition to reopen the waterway. Nevertheless, his repeated calls for ally support have been rejected, and he has expressed dissatisfaction with NATO members for failing to provide military aid during the conflict. Currently, negotiations between the U.S. and Iran have largely broken down over differences regarding nuclear activities. Although Trump has indefinitely extended the ceasefire agreement, both sides have rejected attempts to facilitate talks.

In addition, the United Arab Emirates announced this week that it will withdraw from OPEC, which caused a brief stall in oil prices. However, due to the interference of the Iran war, the UAE is unlikely to increase production in the short term, and the global oil supply crunch remains difficult to alleviate.

Analysts generally believe that the duration of shipping restrictions in the Strait of Hormuz directly determines how long energy prices will remain elevated. The longer both persist, the heavier the cost to the global economy.

S&P Global Ratings has significantly raised its oil price forecasts, increasing its assumptions for WTI and Brent crude for the remainder of 2026 by $15 per barrel each, and for 2027 by $5 per barrel. Its report noted that the "scale of supply losses continues to expand, far exceeding previous expectations."

Analysts at ANZ Research also stated that crude oil prices show no signs of slowing their ascent, as the prospect of a prolonged closure of the Strait of Hormuz continues to weigh on market sentiment. This rally in oil prices sends a clear signal that investors are preparing for a protracted conflict, and oil supply from the Persian Gulf is likely to remain constrained.