Oil Prices in 2026: the Iran War, the Strait of Hormuz and Trump's Statements

Updated: October 24, 2026 · Українська версія

Oil has had its most volatile year since 2022: from about $64 a barrel in January to over $118 at the end of April, a slide almost back to pre-war levels in June, and a new climb in the autumn. The main driver is the US and Israeli war with Iran and the effective closure of the Strait of Hormuz. Below are the timeline, the numbers, and how Donald Trump's statements moved the market.

Key points

In peacetime, about 20 million barrels per day of crude and petroleum products pass through the Strait of Hormuz. That is roughly 20% of global consumption and more than a quarter of all seaborne oil trade.
After US and Israeli strikes on Iran on February 28, 2026, traffic through the strait almost stopped. Brent futures' highest close of the year was $118.03 (April 29); the intraday high was about $126.
In June, after the US and Iran signed a memorandum of understanding, Brent fell to $73.74, its lowest since late February. Fighting resumed in July, and prices climbed again.
On October 23, Brent settled at $116.72 (+3.1%), its highest close since April 29.
In its October forecast, the US Energy Information Administration (EIA) expects an average of $105 in the fourth quarter of 2026, easing to $74 by the end of 2027, provided regional output keeps recovering.

Why the Strait of Hormuz matters

The Strait of Hormuz is a narrow passage between Iran and Oman that links the Persian Gulf to the open sea. Saudi Arabia, Iraq, Kuwait, the UAE, Qatar and Iran itself export oil through it, along with a large share of the world's liquefied natural gas.

The only ways around it are pipelines: Saudi Arabia's East-West pipeline to the Red Sea port of Yanbu, and the UAE's line to Fujairah. Their combined design capacity is several million barrels per day, but actual flows are lower. Before the war, the EIA estimated that only about 2.6 million barrels per day of unused capacity was available to bypass the strait, and port terminals limit throughput further. So even a partial closure takes millions of barrels a day off the market.

The strait's legal status is a separate question. It runs through the territorial waters of Iran and Oman, and for straits like this the UN Convention on the Law of the Sea provides a right of transit passage for ships of all countries. Iran has signed but not ratified the convention, and the US is not a party to it. Claims by either Iran or the US to "control" the strait are therefore political positions, not a recognised legal status.

Timeline: February to October 2026

Prices below are Brent futures settlements unless stated otherwise.

Date	Event	Brent
January – February	US–Iran tensions and talks; the market prices in the risk of war	$63–72
February 28	US and Israel strike Iran. The IRGC warns ships that passage through the strait is banned; traffic drops by about 70%	$72.48 (Feb 27)
March 2–5	The strait is effectively closed; insurers withdraw cover for ships. Iranian drones hit Qatari gas facilities	$81.49 (Mar 3)
Week to March 6	Brent gains 28% in a week, the most since April 2020. WTI gains 35%, a record since futures trading began in 1983	$92.69
March 11	International Energy Agency members agree to release 400 million barrels from emergency stocks, the largest release in the agency's history	above $100 intraday
March 23	Trump postpones strikes on Iran's energy infrastructure for five days, citing "constructive talks". Iran denies any talks	about $98 (−10%)
April 8	US–Iran ceasefire. The biggest one-day price drop since April 2020	$94.75 (−13%)
April 13	After talks in Islamabad fail, the US naval blockade of Iranian ports begins	–
April 17–18	Iran declares the strait open, then closes it again a day later	$90.38 (Apr 17)
April 29–30	Trump says the blockade will continue until a deal is reached	$118.03; about $126 intraday on Apr 30
May 4–6	The US launches "Project Freedom" to escort ships, then pauses it two days later, citing progress in talks	$114.40 (May 4), then below $100
June 17	Trump and Iranian President Pezeshkian sign the Islamabad Memorandum of Understanding. It is not a peace treaty: it extended the ceasefire so the sides could agree final terms, and Trump warned the US would resume strikes if the outcome did not suit it	–
June 24	Tankers start moving through the strait	$73.74
July 8	The truce collapses after attacks on commercial ships; the US strikes Iran. The naval blockade is reinstated on July 14	about $76.5
Late July	Houthi attacks in the Red Sea	back above $100
August	Attacks on ships; US strikes on Iranian sites on Larak Island over mine-laying	$87–97
September 10–11	Drones hit Saudi Arabia's East-West pipeline, the main bypass route, which carried 4–5 million barrels per day during the crisis. The pipeline is shut. According to the US and Saudi Arabia, the drones were launched from Iraq; Iraq's government later said they were launched from Maysan province. Responsibility has not been officially established	spot up to $131 (Sep 15, per EIA)
September 22	The pipeline partially resumes operations	–
October 22–23	New strikes on ships in the Strait of Hormuz; Houthi threats to Saudi Red Sea infrastructure	$116.72 (Oct 23)

Brent in the first half of 2026: from $64 before the war to $118 and back

Brent futures settlement price, US dollars per barrel. Hover over a point to see the date and price.

Key settlement dates from market chronologies; some points are weekly closes, so the date is approximate. Dashed lines mark the start of the war, the ceasefire and the memorandum. The second half of the year is not shown because no complete series of comparable settlement prices is available; see the timeline above and the quarterly chart below.

Data table

Date	Brent, $
Jan 15	63.76
Jan 30	70.69
Feb 5	67.55
Feb 19	71.66
Feb 27	72.48
Mar 3	81.49
Mar 6	92.69
Mar 9	88.43
Mar 20	112.19
Mar 27	112.57
Apr 2	109.03
Apr 8	94.75
Apr 17	90.38
Apr 23	105.07
Apr 29	118.03
May 4	114.40
May 12	107.27
May 19	111.28
May 27	94.29
Jun 5	93.09
Jun 12	87.33
Jun 19	80.57
Jun 24	73.74

How the market reacted to Trump's statements

The US president's words moved prices by 5–10% in a day more than once, sometimes in opposite directions. The most telling examples:

Early March – Trump demands Iran's unconditional surrender. The market prices in a long war: Brent gains 28% in a week.
March 9 – Trump says the US may take control of the Strait of Hormuz. The market reads it as a chance for supplies to resume: Brent settles at $88.43, 4.6% below its March 6 close, after nearing $120 intraday the same day.
March 23 – Trump postpones strikes on Iran's energy infrastructure, citing talks. Brent drops more than 10%, to about $98, one of the strongest market reactions to his words all year.
March 27 – Trump again talks about controlling the strait and jokes about renaming it the "Strait of Trump".
April 1 – after Trump's address, WTI jumps 11%; Brent first dips below $100 on signals the war could end soon, then rises almost 8%.
April 23 – Trump warns Americans that high fuel prices will last "a little while".
April 29 – he says the blockade of Iran will continue until a deal: Brent +6% to $118.03, the highest close of the year.
May 6 – Trump pauses ship escorts, citing "great progress" in talks. On reports of a near deal, Brent falls almost 8%.
May 19 – mixed signals about resuming the war leave the market without a clear direction.
Early August – Trump claims "complete control" of the strait; Iran disputes it, and attacks on ships continue.
October 23 – before boarding Marine One, Trump tells reporters the US "could, if we wanted to, just take all of the oil" and that the Strait of Hormuz "is ours, and that's the way we'll keep it". According to CBS News, he also accused Iran of making up attacks on ships to drive up prices; Iran has claimed strikes on tankers, but only some incidents have been independently confirmed. Brent settled at $116.72 that day, its highest since April 29.

The overall pattern: talk of negotiations and "progress" pushed prices down, while talk of blockades, strikes or controlling the strait by force pushed them up. But the effect of words usually lasted days; the longer-term price level was set by how much oil actually moved through the strait.

How much oil the market lost

According to the EIA, Middle Eastern countries produced about 25.2 million barrels per day before the war. From March to July, the Hormuz crisis shut in an average of 8.5 million barrels per day, peaking at 10.9 million in May. By the autumn, losses had shrunk thanks to bypass routes, convoys and ship-to-ship transfers, but they are still several million barrels a day.

Middle East oil output lost to the Hormuz crisis

Million barrels per day, EIA estimate and forecast

estimateforecast

For comparison: pre-war regional output was about 25.2 million barrels per day. The EIA expects most production to return to pre-war levels by the end of the second quarter of 2027.

Why oil prices in the news differ

During the crisis, different "oil prices" diverged as never before:

Brent futures – an exchange contract for future delivery, and the price most often quoted in the news.
Spot price – the price of physical oil for immediate delivery. In the crisis it ran much higher: according to the EIA, Brent spot averaged $114 in September and reached $131 on September 15. Dubai crude hit a record $166 on March 19.
WTI – the US benchmark, usually cheaper than Brent. In early April WTI rose above Brent, and its premium was the widest since 2009.

So when one source says "oil at $105" and another says "$130", both can be right: they are quoting different prices.

Outlook

The EIA's October forecast assumes that regional constraints persist through the end of 2026 and then gradually ease thanks to convoys, bypass pipelines and a new UAE bypass pipeline expected in 2027. It therefore sees prices peaking in the fourth quarter of 2026 and declining through 2027.

Average Brent price: $69 in 2025, above $100 in the crisis quarters of 2026

Quarterly average Brent spot price, US dollars per barrel

actualEIA forecast

EIA data (Short-Term Energy Outlook, October 2026). The 2025 figure is the annual average. The EIA itself warns that actual price swings are likely to be larger than its forecast shows.

The main risks to this forecast are unfolding right now. Analysts quoted by industry media say further escalation – strikes on tankers, on Saudi energy infrastructure, Houthi threats to Red Sea routes – could push Brent towards $120, while progress in talks could bring it back to $105–110. For 2026 as a whole, the EIA expects an average of $96, and $84 for 2027.

FAQ

Is the Strait of Hormuz closed now?
Not completely, but it is not operating normally either. Some ships pass under convoy or by alternative routes, while attacks on ships and the US naval blockade of Iranian ports continue. Regional exports have largely recovered, but risk and insurance costs keep prices high.

Why did prices fall in June if the war had not ended?
The June 17 memorandum did not end the war, but it extended the ceasefire and opened the way to talks on final terms. Tankers began moving through the strait, and the market bet on the crisis ending. When the truce collapsed in July, prices rose again.

Can Trump's statements lower prices for long?
As 2026 shows, statements usually move prices for a few days. Over the longer run, prices are set by how much oil actually gets through the strait.

Conclusion

In 2026 the oil price effectively became a gauge of the Strait of Hormuz. Every ceasefire and sign of the strait reopening pushed it down; every attack, blockade or threat to bypass routes pushed it up. Trump's statements added sharp swings but did not change the basics: until oil flows from the Persian Gulf recover, prices will stay well above pre-war levels. The EIA's official forecast sees a gradual decline only over the course of 2027, and only if regional output keeps recovering.

This article is for information only and is not investment advice. It reflects information available as of October 24, 2026. Oil prices change daily; use current quotes for any decisions.