Brent Crosses $103 as Hormuz Blockade Takes Effect, OPEC Cuts Q2 Demand Outlook: April 13 Evening Wrap

Crude oil markets swung sharply higher on Monday as the United States Navy began enforcing a blockade of Iranian ports, reversing much of the prior week's decline after peace talks between Washington and Tehran collapsed over the weekend. By the close of trading, Brent crude settled near $103.40 per barrel while West Texas Intermediate (WTI) reached $105.63 intraday before settling at $99.08, erasing the ceasefire-driven discount that had briefly pulled markets below $100.

Blockade Takes Effect, Iran Signals Possible Return to Talks

United States Central Command confirmed at 10 a.m. Eastern Time on Monday that naval forces had commenced a blockade of all maritime traffic entering and exiting Iranian ports, as President Donald Trump had announced late Sunday following the breakdown of Islamabad negotiations. The talks, led on the U.S. side by Vice President J.D. Vance, collapsed over Iran's refusal to commit to abandoning its nuclear program.

Despite the blockade taking effect, diplomatic signals were mixed by afternoon. Trump stated that Iran had reached out and expressed interest in resuming negotiations, with officials from both sides reportedly discussing logistics for a second in-person meeting. Oil markets, which had initially surged as much as 9% on the blockade news, pared gains through the session as traders priced in a potential near-term diplomatic opening.

This latest escalation marks a sharp reversal from last week's brief ceasefire, which had pushed WTI to a settlement near $97.56 on April 9 after the Iran ceasefire erased a $15 geopolitical risk premium. That de-escalation proved short-lived, with weekend talks unravelling over Tehran's nuclear posture. When the blockade announcement was first made Sunday evening, WTI briefly surged past $105 in overnight trading before markets partially retraced on the renewed talk of negotiations.

OPEC Slashes Q2 Demand Forecast as Supply Shock Dominates Pricing

The Organization of the Petroleum Exporting Countries and its allies published their monthly oil market report Monday, cutting the Q2 2026 global demand forecast by 500,000 barrels per day and revising the quarterly outlook to 105.07 million BPD. OPEC cited transitory economic weakness and ongoing disruption to global trade flows caused by the Hormuz crisis as the primary drivers of the revision.

Despite the demand reduction, prices surged rather than fell, illustrating the supply-side dominance now gripping the market. OPEC also revealed that total group output plunged by 7.9 million barrels per day in March, with Saudi Arabian production falling to 7.8 million BPD as the de facto closure of the Strait of Hormuz throttled export routes affecting nearly 20 percent of global oil supply. The group maintained its full-year 2026 demand growth forecast at 1.4 million BPD, anchored by expected recovery in Chinese and Indian consumption through the second half of the year.

Analysts noted the apparent market paradox. The fear of the next barrel not arriving is far outweighing the fact that fewer barrels may be needed this quarter, with geopolitical supply risk currently dominating demand considerations in pricing. The Asian LNG market has felt the same strain, with imports hitting a six-year low as Qatari supplies remain trapped by the strait closure.

Saudi Aramco Holds Westward Routing as Pipeline Capacity Tests

Saudi Aramco continued to route crude westward through its East-West Pipeline, restored earlier this month to full 7 million BPD capacity following damage to the Khurais oil field. The kingdom has been diverting additional volumes through the Red Sea corridor to compensate for Hormuz disruptions, though analysts note the pipeline's physical limits mean it cannot fully replace Hormuz throughput for the broader region.

Prices at the Close: April 13, 2026

• Brent Crude: $103.40 USD/barrel (up approximately 7% on the day)
• WTI Crude: $99.08 USD/barrel settlement; $105.63 intraday high
• Western Canadian Select (WCS): $84.22 USD/barrel (approximately $116.18 CAD/barrel)
• Henry Hub Natural Gas: $2.63 USD/MMBtu (down 0.73%)

The WCS differential to WTI remained wide at approximately $15 USD per barrel, reflecting ongoing pipeline capacity constraints and quality discounts for heavy crude. At a USD/CAD exchange rate near 1.38, WCS producers received roughly $116.18 CAD per barrel Monday, a figure supportive of continued investment in Alberta oil sands expansion despite the geopolitical uncertainty.

Henry Hub natural gas slipped to $2.63 USD/MMBtu, down 0.73 percent, as mild spring weather across North America continued to suppress heating demand. Storage injections have begun outpacing seasonal norms, keeping gas markets comparatively quiet amid the crude oil volatility.

What to Watch

The OPEC+ group holds a critical production decision meeting on May 3 that could reshape second-half pricing. That gathering had initially been positioned as a potential production increase pivot point if the Iran ceasefire held. With conflict re-escalating, the May 3 agenda may shift toward managing supply shortfalls rather than expanding output. Markets will also be monitoring closely for confirmation of a second Iran-U.S. meeting, which could rapidly reverse the current risk premium if a credible agreement framework emerges.