Crude oil prices jumped 7% on perpetual futures marketplaces like Hyperliquid and Aster on Saturday after Iran announced the sudden closure of the Strait of Hormuz. WTI rose to $79, while Brent climbed to $82, marking a 7% increase from their lowest levels this month. The price surge reflects renewed supply risks despite US assurances that commercial traffic through the vital waterway remained intact.

US Central Command stated that commercial maritime traffic through the Strait of Hormuz increased on Saturday, with 55 merchant ships safely transiting the corridor. The vessels moved more than 17 million barrels of oil to global markets, according to Centcom. The Joint Maritime Information Center affirmed safe passage along a designated route "free of arbitrary requirement claims or impediments," while US forces remained "present and vigilant" to enforce the agreement with Iran.

Maritime vessels continued to move through the Strait of Hormuz on Sunday, though at a much lower rate, a day after Iran announced that it had closed the strategic waterway to shipping. Transits through the strait dropped to 12 today, down from more than 21 on Saturday, according to maritime risk analytics firm Windward. The recovery in shipping traffic that began on Thursday stalled within 24 hours of the Iranian announcement. The current traffic profile "resembles the late‑blockade baseline more than a functioning open strait," Windward posted on X.

Market Data and Geopolitical Tensions

Iran, however, maintained it had shut the vital shipping route, threatening a critical corridor for global crude shipments. The decision was linked to ceasefire breaches by the US and Israel, including Israeli military activity in Lebanon. The order came from the Khatam al-Anbiya Central Headquarters, Iran’s top joint military command, which warned the closure was only a "first step" if perceived aggression continued. The Islamic Revolutionary Guard Corps (IRGC) Navy warned that all vessels should refrain from approaching the strait, stating they would bear full responsibility for any risks.

The conflicting claims have increased the risk of renewed volatility in crude markets. Iran’s threat of further escalation keeps a bullish risk premium in play as the peace-agreement timeline faces growing strain. The Institute for the Study of War noted that factions within the Iranian regime want to leverage the Strait to pressure the US on Israel, specifically to secure an end to Israeli operations in Lebanon. The Institute added that Iran "likely calculates that it can use the strait as a tool to put greater economic pressure on the US to meet Iranian demands."

Diplomatic Developments

US forces lifted the blockade on maritime traffic entering and exiting Iranian ports following the President’s direction. US naval ships will remain in the area to ensure all aspects of the agreement are followed. Meanwhile, Pakistan’s Foreign Ministry announced that technical-level talks between the US and Iran will be held in Switzerland on Sunday, with mediators from Pakistan and Qatar joining the discussions. Iranian Foreign Ministry spokesman Esmail Baghaei confirmed an Iranian delegation will soon travel to Switzerland.

US Vice President JD Vance and US officials held high-stakes talks with Iran behind closed doors in Switzerland. The two countries are hammering out the details of a peace agreement that includes a permanent end to hostilities, the reopening of the Strait within 30 days, and a 60-day nuclear negotiating window extendable by mutual consent. US Vice President JD Vance said the goal of the ongoing diplomacy is to "transform the Middle East" and create "a future where everybody can work together to promote peace and prosperity for everyone."

President Donald Trump warned Iran that the US could become the "Guardian Angel" of the strait and take 20% of the oil. "We may take over the strait, if we have to," Trump told Fox News. "If they don’t make a deal, we’ll collect tolls." The Iranian delegation protested with the US delegation in Switzerland in response to Trump’s recent threats. Iran’s Tasnim News Agency reported that the strait will remain closed unless "Israel’s actions in Lebanon are brought under control."

Southern Iraq's crude production has surged to 1.5 million barrels per day (BPD), representing an increase of approximately 500,000 BPD, as loadings resume at key export terminals and logistical constraints ease. However, Iraq's Oil Minister has cautioned that the return to normal output levels will be gradual, even as oil fields stand ready to resume production operations. The minister also noted that crude export resumption will be contingent on smooth transit through the Strait of Hormuz, underscoring the continued sensitivity of the region's export infrastructure to maritime conditions.

Southern Output and Export Terminal Activity

The recovery in Iraq's southern crude production has been underpinned by improved tanker arrivals at export terminals, enabling higher volumes of crude to be loaded and shipped. The West Qurna 2 restart contributes fresh supply momentum to a sector already showing strong operational improvement. The following table summarizes the key output figures reported:

West Qurna 2 Oilfield Restart

The restart of the West Qurna 2 oilfield at 150,000 BPD represents a notable addition to Iraq's southern production base. The resumption of output at this field further strengthens the country's ability to sustain and grow crude exports through its southern infrastructure.

Rumaila Oilfield Contributes to Supply Increase

The Rumaila oilfield, one of Iraq's largest producing fields, has seen its output increase by 300,000 BPD to 650,000 BPD as shipping access to the region improves. This increase at Rumaila forms a substantial part of the broader recovery in southern Iraqi crude production, complementing the West Qurna 2 restart.

Gradual Recovery and Hormuz Transit Conditions

Despite the operational readiness of oil fields, the Oil Minister's statement signals a measured approach to restoring full production and export capacity. Crude export resumption remains contingent on smooth transit through the Strait of Hormuz, a critical maritime route for global oil shipments. The easing of disruptions in the strait has already facilitated greater tanker movement to Iraq's southern export terminals, contributing to an increase in global oil supply. The combination of higher Rumaila output, the West Qurna 2 restart, improved terminal access, and the minister's guidance on a gradual recovery trajectory together define the current state of Iraq's southern oil sector.