From $72 to 18 in Two Months: The War That Rewrote the Energy Market

Where Things Stand Right Now

As of April 29-30, the situation is this:

• The Strait of Hormuz remains effectively shut to normal commercial traffic.
• The US is maintaining a naval blockade of Iran alongside its military campaign.
• Iran has refused to reopen the strait until the US lifts its blockade.
• Peace negotiations, including talks involving US envoys Steve Witkoff and Jared Kushner in Islamabad, have stalled.
• The UAE has announced it will exit OPEC next month, citing the need for greater flexibility — a significant development for global supply coordination.
• US crude and petroleum product exports have surged to nearly 12.9 million barrels per day in April 2026.
• WTI crossed 06; Brent at 18.

Can Oil Hit 40?

The short answer: YES. The longer answer depends on what happens in the next few weeks.

Commodity Context founder Rory Johnston has laid out a clear framework. Any reopening of the Strait of Hormuz would likely trigger an immediate drop of between 0 and $20 in crude prices due to the unwinding of speculative positions. But supply chain damage, infrastructure destruction, and ongoing production outages would keep the market tight, anchoring Brent in the $80–90 range even in a best-case scenario.

If the strait remains closed and the blockade continues — which is the current trajectory — prices have room to run higher. A number of energy analysts have pointed to 30–140 as a realistic ceiling if the conflict drags on through May or June without any meaningful resolution. The UAE's exit from OPEC also removes a potential buffer in terms of coordinated supply response.

The IEA's description of this as the "largest supply shock in oil market history" is not hyperbole. It reflects the structural reality that 20% of global oil trade being disrupted — even partially — has no historical precedent in terms of sustained impact.

Also Read: 20% of the World's Oil Was Blocked This Week — the Biggest Energy Shock Since 1973

What This Means for India

India imports roughly 85% of its crude oil requirements. Before the conflict, a significant portion came from the Middle East — much of it travelling through or near the Strait of Hormuz. India has been scrambling to reroute imports, increase purchases from Russia, West Africa, and the US, and dip into strategic reserves.

84% of crude oil and 83% of LNG passing through the Strait goes to Asia. For India, this conflict is not a distant geopolitical event. It is a direct hit on the import bill, the current account deficit, and inflation.

Retail petrol and diesel prices in India are at a politically sensitive point. The government has so far absorbed some of the upstream cost, but that cannot continue indefinitely if Brent stays near 20. Any pass-through to consumers will feed into CPI inflation, which affects everything from food prices (via transport and fertiliser costs) to monetary policy.

Also Read: Strait of Hormuz Toll: Iran's $2M Per Ship Charge, Suez Canal Fees & World Sea Trade Routes Explained

The Geopolitical Wildcard: What Could Change Things

There are two scenarios that could shift the oil market significantly in either direction.

First — a ceasefire or a renewed deal framework. Even a credible indication that talks are progressing could send prices down 5–20 per barrel quickly. Markets price in expectations, not just current reality.

Second — an escalation involving Gulf Cooperation Council countries or a direct attack on major oil infrastructure. That could send prices past 30 rapidly and test the 40 level.

Right now, neither scenario is imminent. The Islamabad talks stalled. Trump has renewed threats against Iranian power plants and bridges. Iran has called the US blockade a violation of prior understandings. The Houthis have fired missiles at Israel, adding another actor to the conflict.

This is not a market stabilising anytime soon.

One Number to Watch

The US is now exporting nearly 12.9 million barrels of crude and petroleum products per day — a record. This means the US is the primary beneficiary of the supply disruption, financially. It also means any serious diplomatic initiative from Washington will have to weigh those economic gains against broader geopolitical goals. That tension is not trivial.