$XTI Crude Oil: Strait of Hormuz — The Lifeline and Powder Keg of Global Oil Prices

The crude oil market saw a historic surge in early April. International Brent crude futures ended at $109.24 per barrel, XTI crude futures ended at $112.06 per barrel, and XTI once jumped by 11.93%, even showing an abnormal phenomenon of XTI prices exceeding Brent—reflecting a situation of severe supply tightness. A month ago, Goldman Sachs’ forecast for the 2026 Brent average was only $56, while JPMorgan’s was even lower at $53—now Brent has risen above $109, with a monthly increase of about 43%. Goldman Sachs has significantly raised its forecast, lifting the 2026 Brent average from $77 to $85 per barrel, and XTI from $72 to $79 per barrel, expecting that high oil prices will remain for the long term.

The core driver behind the surge in oil prices is the escalation of geopolitical conflict in the Middle East. On April 2, Trump delivered a nationwide address, providing no ceasefire timeline, but instead issued threats to Iran, saying that if no agreement is reached, the U.S. will continue to strike Iran’s energy facilities and sanction Iranian oil. Trump even urged countries to “snatch oil” through the Strait of Hormuz, and said that “when the Iran conflict ends, the strait will naturally open.” Iran, meanwhile, emphasized that the Strait of Hormuz is under its “full control,” reiterating that it will block the strait as a countermeasure. If the disruption of the Strait of Hormuz extends to 10 weeks, Brent crude could break the historical record set in 2008 of $147. But there are also signs of easing—on April 3, multiple parties confirmed a ceasefire and arrangements for peace talks, causing Brent futures in the European morning session to fall by more than 8% at one point, and temporarily removing the geopolitical risk premium of about $10 to $15 per barrel. However, after Iran refused to meet in Islamabad, negotiations once again fell into a stalemate. China Galaxy Securities expects that in April Brent prices will trade in a wide range around $100, and that short-term fluctuations will intensify due to geopolitical uncertainty.
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