Brent crude rose to $122.31 a barrel after touching an intraday high of $126.41, while U.S. West Texas Intermediate climbed to $108.34, Reuters reported. The price surge reflects a market that is no longer treating the conflict as a short disruption, but as a supply shock that could reshape energy costs through the summer.
Oil prices surge as Hormuz flows tighten
The Strait of Hormuz is the key pressure point. The waterway normally carries about 20 million barrels per day of crude oil and oil products, or roughly a quarter of global seaborne oil trade, according to an International Energy Agency factsheet. With limited pipeline routes available to bypass the strait, even a partial closure can quickly force refiners and governments into emergency buying.
The Associated Press said Brent crude for June delivery surged past $125 as stalled U.S.-Iran talks dimmed hopes for reopening the strait, while benchmark U.S. crude moved above $109. Before the war began in late February, Brent was trading around $70 a barrel, the AP reported.
The jump is spreading beyond oil futures. Higher crude prices are lifting gasoline, diesel, jet fuel and shipping costs, putting new pressure on central banks already trying to contain inflation. For consumers, the shock is likely to show up first at the pump and then in airfares, freight charges and food prices.
Why the blockade standoff is shaking global markets
The U.S. has maintained a blockade on Iranian ports, while Iran has kept the Strait of Hormuz largely closed to shipping. Washington is now seeking support for an international maritime coalition to restore freedom of navigation through the strait, according to another Reuters report.
That diplomatic push underscores the danger for oil markets: a military or political mistake could keep millions of barrels per day off the market, while a rushed reopening could leave shipping companies, insurers and refiners reluctant to move cargoes without clearer security guarantees.
Older oil shocks show why traders are nervous
This crisis did not come out of nowhere. A 2023 Reuters explainer traced years of threats, tanker seizures and military incidents around Hormuz, including the 1980s Tanker War and Iran’s 2012 threat to block the strait during a sanctions dispute.
Markets also remember how quickly supply fears can move prices. A Reuters graphic on the 2019 Saudi oil facility attacks showed how strikes on energy infrastructure can disrupt global supply, while a 2024 Reuters report on Iran’s attack on Israel showed how direct regional confrontation can quickly add a geopolitical premium to crude.
The difference now is scale. Earlier shocks were often absorbed because spare capacity, inventories or diplomacy helped calm traders. This time, the market is confronting a physical choke point, a direct U.S.-Iran standoff and uncertainty over how long tankers will remain blocked.
Oil prices raise inflation and growth risks
The World Bank warned that energy prices are projected to rise 24% this year, pushing overall commodity prices up 16% as the Middle East war hits oil, gas, fertilizer and metals. The bank said shipping disruptions in Hormuz have triggered the largest oil supply shock on record, with developing economies facing weaker growth and higher inflation, according to its latest Commodity Markets Outlook.
World Bank Chief Economist Indermit Gill described the impact as a chain reaction moving from “higher energy prices” to food costs and debt pressure. That sequence is what makes the current oil shock dangerous: it can hit households, airlines, manufacturers and food producers at the same time.
What could cool oil prices next
The clearest path to lower prices would be a durable reopening of the Strait of Hormuz, a negotiated easing of the U.S. blockade and credible security guarantees for commercial shipping. Additional output from producers outside the conflict zone could help, but replacement barrels cannot fully offset a prolonged disruption at one of the world’s most important energy chokepoints.
Until tanker traffic resumes at scale, traders are likely to keep a war premium in crude. That means oil prices could remain volatile even if diplomacy improves, because refiners, insurers and shippers will need proof that the route is safe before normal flows return.
