Drone footage of oil storage containers and facilities at the Total Energy refinery at the Leuna chemical complex in Leuna, Germany, March 17, 2026.
Annegret Hills | Reuters
Oil prices widened as US President Donald Trump redoubled his threat to attack Iranian civilian infrastructure and the Islamic Republic’s leaders warned that Iran would be “annihilated overnight” if it failed to reopen the Strait of Hormuz.
U.S. West Texas Intermediate crude oil futures for May were up more than 2.9%, trading at $115.63 per barrel as of 11:08 p.m. ET. Brent crude oil for June delivery rose about 1.5% to $111.43 a barrel.
brent crude oil price
President Trump on Monday reiterated his threat that the United States would destroy Iranian power plants and bridges if Tehran does not reopen the Strait of Hormuz by 8pm ET on Tuesday, while suggesting that Iranian leaders are in serious negotiations.
The closure of the narrow waterway linking the Persian Gulf and the Gulf of Oman has caused a supply shock, sending prices of crude oil, jet fuel, diesel and gasoline soaring since the war broke out on February 28.
“They have until tomorrow,” the president said. “We’ll see what happens next. All I can say is they’re negotiating, we’re in good faith and we’re going to figure it out. We’re working with great countries who want to end this, because it affects their countries as well.”
Reuters reported that the United States and Iran are discussing a framework plan to end the five-week conflict, as Tehran pushes back against President Donald Trump’s pressure to quickly reopen the Strait of Hormuz, which would allow the energy artery to resume traffic.
According to Axios, Iran rejected the US ceasefire proposal and presented its own 10-point plan, which included a permanent end to hostilities in the region rather than a temporary ceasefire, a protocol for safe passage through the Strait of Hormuz, sanctions relief, and reconstruction.
However, the report says it remains unlikely that a ceasefire agreement will be reached by the deadline.
President Trump responded to the proposal by saying, “They… made an important proposal. It’s not enough, but they took a very important step. Let’s see what happens.”
Traffic trickles through
Ed Yardeni, president of Yardeni Research, said the outcome of the peace talks remains uncertain and investors are on edge, torn between pricing in an imminent end to the conflict and further escalation.
“There is no way to predict the outcome. We cannot rule out the possibility that Iran will give in. Or President Trump may explain that negotiations are progressing and extend the deadline again, otherwise the war will escalate,” Yardeni said. “The fog of war remains thick.”
Shipping traffic through the Strait of Hormuz is gradually resuming, with eight tankers passing through the Strait on Monday, up from an average of less than two a day in March, according to S&P Global Market Intelligence. But this is only a fraction of pre-war levels, with an average of 20 million barrels of oil and products passing through the Strait per day in 2025.
“Margins are improving in terms of capital flows out of the (Strait of Hormuz),” said Michael Wang, senior currency analyst at MUFG Research, adding that the path to peace remains “narrow and unlikely” given the wide disparity in expectations between the parties to the conflict.
Even if strait traffic is fully reopened, Wang said it will still be some time before actual supplies reach Asian countries facing dire energy shortages, predicting the timeline to be “at least three to six months.”
