Trump's Ultimatum to Iran Causes Oil Prices to "Boil Over", Persisting Until 2027?

Oil prices continue to boil over following Iran’s threat to close the Strait of Hormuz indefinitely. This move is a response to the ultimatum from US President Donald Trump regarding the restoration of oil traffic through this critical waterway. Meanwhile, Goldman Sachs on Friday estimated that these elevated oil prices could persist until 2027. Global benchmark Brent crude rose 1.69 per cent to around $114.09 per barrel at the opening of trading. Additionally, US crude prices increased 2 per cent to $100.29. In response, if Trump proceeds with that action, Iran will fully close the Strait of Hormuz and will not reopen it until all destroyed power plants are rebuilt. Iran also stated it will target US and Israeli energy and communications infrastructure in the region. For context, the war in Iran, now in its fourth week, has caused major disruptions to oil supplies, particularly due to the effective closure of the strait, the world’s busiest oil shipping route. Head of petroleum analysis at GasBuddy, Patrick De Haan, said one gallon of petrol could reach $4 in the early part of this week. According to him, petrol prices will recover slowly even after the war ends. “The process will be very slow as long as this continues, because it will take longer for the global market to recover,” he said, quoted from CNN on Monday (23/3/2026). Meanwhile, Treasury Secretary Scott Bessent said Americans will opt for temporarily higher prices if it means decades of peace in the Middle East. On the other hand, stock futures contracts also fell at the opening of Sunday’s trading. Dow index futures dropped 0.6 per cent, or 237 points. S&P 500 futures fell 0.6 per cent, while Nasdaq futures declined 0.8 per cent.