Brent crude surged above $105 per barrel this week as escalating tensions between the United States and Iran disrupted traffic through the Strait of Hormuz, a critical global oil route.
The benchmark settled at $105.07 on Thursday and held near $105.73 on Friday, while U.S. West Texas Intermediate (WTI) rose to around $96.
Naval Blockade Disrupts Key Oil Corridor
The price spike follows a deepening naval standoff, with both Washington and Tehran enforcing rival blockades. The U.S. has restricted Iranian ports since April 13 and intercepted multiple oil tankers, while Iran has seized vessels and insists ships obtain its approval before crossing the strait.
Oil tanker traffic has dropped sharply, raising fears of prolonged supply disruptions. Around 20 million barrels per day previously passed through the waterway.
“The longer the strait remains closed, the greater the economic costs – raising the likelihood that one side will be forced to back down,” Commonwealth Bank of Australia said.
Ceasefire Holds, But Tensions Persist
Although a broader U.S.-Iran ceasefire remains in place, analysts warn the situation is far from stable.
“The thing is, a ceasefire is a funny term to use in conjunction with a blockade and rolling tensions and animosities,” said Vishnu Varathan of Mizuho. “It’s not going to be a linear de-escalation… I don’t think anybody in the market truly believes that this will be over in a week or two.”
Adding to concerns, Israel signaled it may resume military operations against Iran, pending U.S. approval.
Energy Security Concerns Mount
Fatih Birol, head of the International Energy Agency, warned the الأزمة represents “the biggest energy security threat in history.”
“As of today, we’ve lost 13 million barrels per day of oil and there are major disruptions in vital commodities,” he said.
Despite the surge, oil remains below $110 as tentative diplomatic efforts continue, including expected talks involving Iran. However, with shipping constrained and geopolitical risks high, markets are bracing for continued volatility.