Oil Prices Climb Toward $110 as Iran War Uncertainty Persists
Oil prices moved higher again on Friday, nearing the $110 per barrel level as ongoing tensions linked to the Iran conflict continued to unsettle markets. Investor concerns remained elevated despite President Donald Trump’s decision to extend the deadline for potential U.S. strikes on Iranian energy infrastructure.
By 06:00 ET (10:00 GMT), Brent crude futures for May delivery rose 1.8% to $109.92 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude gained 1.7% to $96.08 per barrel.
Brent Attempts Recovery Despite Weekly Pressure
Although Brent crude is still on track for a weekly decline, prices have recovered a significant portion of earlier losses. The rebound was supported by cautious optimism around possible diplomatic progress in resolving the nearly month-long Middle East conflict.
Trump Extends Iran Deadline to April 6
President Donald Trump announced late Thursday that the deadline for Iran to reopen the Strait of Hormuz has been extended to April 6. Failure to comply could result in U.S. strikes on Iranian energy facilities.
In a post on Truth Social, Trump stated that the extension was requested by Iran and claimed that negotiations between Washington and Tehran were ongoing and progressing well. He dismissed conflicting media reports as inaccurate.
Previously, Trump had warned that the U.S. would target Iranian power infrastructure if the Strait remained blocked. The strategic waterway is responsible for transporting roughly 20% of global oil supply, making it critical for energy markets.
Markets Remain Skeptical Despite Diplomatic Signals
Despite the extension, analysts noted that uncertainty remains high. MUFG analysts highlighted that while any credible de-escalation could support a risk-on environment, markets are still pricing in significant geopolitical risks.
Iran, for its part, has denied that any direct negotiations with the United States are currently taking place, adding to the uncertainty.
G7 Focuses on Strait of Hormuz Crisis
Diplomats from the Group of Seven (G7) are set to meet in France, with discussions expected to center on the Strait of Hormuz and potential international efforts to keep the route open.
So far, U.S. calls for coordinated global action have received limited support from other nations.
Geopolitical Premium Keeps Oil Elevated
According to analysts at ING, Trump’s extension may ease immediate supply concerns, but the broader geopolitical risk premium remains firmly in place.
They estimate that around 8 million barrels per day of supply are already disrupted, while a much larger volume of oil flows through the Gulf remains at risk. As a result, oil prices are likely to remain supported by geopolitical uncertainty.
Inflation Risks and Rising Bond Yields Add Pressure
Investors are also increasingly concerned about a potential surge in inflation driven by higher energy prices. This has fueled expectations that central banks may need to keep interest rates elevated or even consider further rate hikes.
Government bond yields have responded accordingly, with the U.S. 10-year Treasury yield climbing to its highest level since July. Sovereign yields in Germany and France also moved higher.
