Yesterday (28), the most active Brent contract closed higher, reaching USD 111.26/bbl (+2.8%). WTI futures followed a more pronounced trajectory, ending the day at USD 99.93/bbl (+3.7%).
The upward movement was driven by the combination of stalled peace talks and the ongoing closure of the Strait of Hormuz. The decision by the United Arab Emirates to leave OPEC+ was absorbed by the market without significant reactions, given the logistical challenges of exporting the country’s potential production increase through the Gulf.
This morning (29), the Brent contract for June delivery is trading up 3.0%, quoted at USD 114.59/bbl as of 8:40 AM Brasília time. The movement reflects expectations that the conflict will persist for a longer period, further straining the global oil balance due to the absence of barrels typically supplied from the Persian Gulf.
Naval Blockade of Iranian Ports Likely to Continue
According to a Wall Street Journal report, U.S. President Donald Trump instructed his advisors to prepare for a prolonged blockade of Iranian ports, raising the likelihood of an even longer supply disruption. In parallel, Trump posted on social media urging Tehran to "be smart and sign a deal soon."
Why this matters: The possibility of an extended suspension of oil and derivative exports from the Persian Gulf contributes to the perception that the global balance of the commodity will remain heavily impacted by the region's supply restrictions, with approximately 10 mbpd—or 10% of global supply—off the market for a period of two months.
Outlook: The negotiating positions of both sides remain far apart. Iran demands a formal end to the conflict before any discussion of its nuclear program, while the U.S. insists that progress in negotiations is contingent upon including this topic at the table.
- Government sources indicate that U.S. intelligence agencies are studying how Iran might react if Trump declares unilateral victory in the conflict, suggesting that scenarios for resolving the impasse remain highly speculative.
What to expect? The clear shift in behavior among financial market participants—who are adopting a less optimistic stance regarding diplomatic negotiations—will likely continue to drive oil prices higher.
- It’s worth noting that this bullish momentum has been sustained for eight consecutive days, with the market showing strong recovery after the significant drops recorded on April 17, when Iran announced a reopening of the Strait of Hormuz—reversed the very next day.
- In this context, the market continues to price in the substantial deficit caused by the conflict, with expectations of this scenario persisting weighing heavily on energy commodity futures.
UAE Exit from OPEC+ Fails to Ease Market Amid Hormuz Closure
The United Arab Emirates formally announced yesterday its exit from OPEC+, effective May 1, ending its participation as the bloc’s fourth-largest producer.
Why this matters? The UAE’s departure is structurally significant for OPEC+’s medium-term balance, but its immediate impact is neutralized by logistical constraints: with the Strait of Hormuz closed, the additional volume lacks a viable export route through the Gulf.
Outlook: Abu Dhabi’s decision signals growing tensions within OPEC+ and could deepen the bloc’s fragmentation, especially if the conflict prolongs the inability to export via the Strait of Hormuz.
- ADNOC completed its first LNG shipment through the Strait since the conflict began on February 28, indicating that some selective traffic remains possible, albeit irregular and limited.
- The UAE’s exit formalizes long-standing tensions over production quotas, but the market is still prioritizing geopolitical factors over institutional ones.
- It’s important to highlight that the country has been one of the most affected by the war, with a 45% reduction in output between February and March, currently operating around 1.9 mbpd.
What to expect? In the short term, until the Strait of Hormuz resumes normal operations, the UAE’s departure from OPEC+ will have a marginal impact on prices. The decision’s relevance is expected to grow in the long term, when—if Gulf flows normalize—the additional volume from the former member could exert downward pressure on the price curve.
