WEB DESK: Global crude oil markets opened the week on a strong note, with prices climbing further as escalating conflict in the Middle East fuels concerns over disrupted supply routes.
Benchmark Brent crude rose by $1.71, or 1.6%, reaching $110.74 per barrel in early trading. Meanwhile, West Texas Intermediate (WTI) gained $0.71, or 0.6%, to trade at $112.25 per barrel.
The latest increase follows last week’s sharp rally, which marked the biggest weekly surge since 2020. Prices spiked after Donald Trump pledged continued military action against Iran, intensifying fears of prolonged instability in the region.
A major factor behind the surge is the disruption in the Strait of Hormuz critical artery for global energy supplies. The waterway, which handles oil shipments from countries such as Iraq, Saudi Arabia, Qatar, Kuwait, and the United Arab Emirates, has been largely affected following Iranian strikes on shipping lanes since late February.
With traditional supply chains under strain, refiners are increasingly turning to alternative sources, particularly cargoes from the U.S. Gulf Coast and the North Sea region.
Market analysts note that competition for available supplies has intensified. “Buyers are aggressively bidding for U.S. crude, while Brent prices are rising even more rapidly,” analysts observed in a market update.
Tensions escalated further after President Trump warned Tehran of potential strikes on key infrastructure if the Strait of Hormuz is not reopened, issuing the threat in a strongly worded message over the weekend.
Despite the disruptions, some shipping activity has continued. Data indicates that vessels from countries considered friendly by Iran including those operated or owned by Oman, France, and Japan have been allowed to transit the strait.
Diplomatic efforts to ease tensions appear stalled. Reports suggest that Tehran has declined immediate talks with U.S. officials in Islamabad, raising concerns that the conflict could drag on.
On the supply side, the OPEC+ group, which includes major producers and allies like Russia, has agreed to a modest output increase of 206,000 barrels per day for May. However, analysts believe the impact may be limited, as several key producers are struggling to boost production amid ongoing conflict.
Additionally, Russian exports have faced disruptions due to recent Ukrainian drone strikes targeting infrastructure in the Baltic region, although operations at the Ust-Luga terminal have reportedly resumed after a brief halt.
With geopolitical risks mounting and supply uncertainties persisting, oil markets remain highly volatile, with traders closely watching developments in the Middle East.
