Brent crude tops $110 per barrel as Strait of Hormuz disruptions intensify

Brent crude oil crossed $110 per barrel this week, a price level not sustained for any extended period since the months following Russia's invasion of Ukraine in 2022. The move is being driven by concrete disruption to oil flows through the Strait of Hormuz, where Iran's ongoing conflict with the United States and Israel has raised the operational risk for tankers transiting one of the world's most heavily trafficked energy corridors. The strait carries approximately 21 million barrels per day, roughly 20% of global oil supply.

This is not just a futures market pricing in risk. Several major tanker operators have suspended or severely restricted Hormuz transits in recent days, forcing cargo to be rerouted around the Arabian Peninsula via the longer and more expensive route through the Bab-el-Mandeb strait and around the Cape of Good Hope. That adds 10 to 16 days to delivery timelines depending on destination, and the cost of that time shows up immediately in the spot price for crude.

What is actually happening at the Strait of Hormuz

The strait itself is about 33 kilometers wide at its narrowest point, with only two 3-kilometer shipping lanes, one inbound and one outbound. Iran controls the northern coastline. The Islamic Revolutionary Guard Corps Navy has a long history of using small boat swarms, mines, and drone harassment to pressure commercial shipping during periods of heightened tension with the West.

Since the conflict escalated, IRGC naval units have conducted close approaches to commercial tankers on multiple occasions. Lloyd's of London war risk insurance premiums for Hormuz transit have risen sharply, with one underwriting source reporting premiums as high as 1.5% of vessel value per voyage, compared to roughly 0.1% before the conflict began. A very large crude carrier, or VLCC, has a hull value of approximately $100 million, which makes each crossing a significant insurance cost before fuel and crew are factored in.

Which countries are most exposed to Hormuz disruption

Japan, South Korea, and India are the countries most immediately vulnerable to sustained Hormuz disruption. Japan imports approximately 90% of its crude oil from the Middle East, and the majority of those shipments transit the Hormuz. South Korea's dependency is comparable. Both countries have strategic petroleum reserves, but Japan's reserves are calculated to cover roughly 145 days of consumption at normal demand levels, a figure that starts declining quickly if Hormuz transits remain impaired for weeks rather than days.

China is also a major Hormuz-dependent importer. Chinese refiners have been in contact with Saudi Aramco, the Abu Dhabi National Oil Company, and Iraqi state oil companies about contingency supply arrangements. Saudi Arabia can route some oil through the East-West Pipeline to the Red Sea port of Yanbu, bypassing the strait entirely, but that pipeline has a maximum capacity of roughly 5 million barrels per day, far less than the total volume currently flowing through Hormuz from Gulf producers.

US strategic petroleum reserve and production response

The US is less directly exposed to Hormuz disruption than Asian importers because American domestic production has been running near record levels. The Energy Information Administration reported US crude production at approximately 13.6 million barrels per day in February 2026. The country is a net exporter of petroleum on a product basis, though it still imports some grades of crude that domestic refineries are configured to process.

The Biden administration drew heavily on the Strategic Petroleum Reserve in 2022, releasing approximately 180 million barrels to dampen oil prices following the Russia-Ukraine shock. The Trump administration refilled portions of the SPR through 2025 at prices below $80 per barrel, and the current reserve stands at approximately 395 million barrels. Whether the administration taps the SPR to counter the current price spike has not been confirmed publicly, but at $110 per barrel the political pressure to release barrels is significant.

OPEC+ response and spare capacity

OPEC+ holds meaningful spare production capacity, primarily in Saudi Arabia and the UAE. Saudi Arabia alone is estimated to have approximately 2 to 3 million barrels per day of spare capacity it could bring online within 30 to 90 days. The cartel held an emergency virtual meeting this week but did not announce an immediate output increase, citing the difficulty of routing additional barrels to market if Hormuz remains constrained.

That constraint is real. Saudi Arabia's main export terminal at Ras Tanura sits on the Persian Gulf coast and requires Hormuz transit for most of its shipments. The Yanbu pipeline alternative helps, but it cannot absorb a full surge in export volume. If Hormuz disruption persists beyond 30 days, the ability of Gulf producers to physically move additional barrels to market becomes the binding constraint regardless of how much crude they pump.

What $110 oil does to the US economy

The last time oil sustained above $110 per barrel was in the summer of 2022, when US gasoline prices averaged $5.01 per gallon nationally in June of that year, according to AAA data. At $110 Brent, similar retail gasoline price levels are plausible within weeks depending on refinery margins and regional distribution costs. Every one-cent increase in the national average gasoline price costs US consumers approximately $4 million per day in additional fuel spending.

Airlines are particularly exposed. Jet fuel typically accounts for 20 to 30% of an airline's operating costs at normal prices. Delta Air Lines reported jet fuel costs of $2.58 per gallon in Q4 2025. Jet fuel prices track crude oil with roughly a two to four week lag, which means airlines are currently burning through fuel purchased before prices moved above $110 and will absorb the full cost impact in April and May. United Airlines, Delta, and American Airlines all have fuel hedging programs, but hedge coverage for Q2 2026 was running at roughly 30 to 40% of consumption, leaving the majority of their fuel exposure to spot market prices.

How long analysts think elevated prices could last

Goldman Sachs commodity analysts published a note on Thursday projecting that Brent could reach $120 per barrel if Hormuz disruptions continue for another three to four weeks without a negotiated resolution. Their base case assumed some normalization of transit within 30 days, which would push prices back toward $95 to $100 per barrel by late April. The bear case, involving a sustained closure of more than 60 days, modeled Brent reaching $135 to $140.

The critical variable is whether Iran makes any formal move to restrict or threaten shipping in the strait beyond the IRGC harassment already documented. Iran has never fully closed the Hormuz, and doing so would cut off oil revenues from its own Gulf neighbor Iraq, which relies on Hormuz exports for approximately 90% of government revenue. That economic interdependency is one of the reasons a complete closure remains unlikely even in a prolonged conflict scenario. The next scheduled OPEC+ ministerial meeting is April 14, 2026.