Global oil prices surged sharply on Monday as geopolitical tensions escalated following a planned US naval blockade targeting Iranian oil exports. Benchmark Brent Crude rose by $7.32, or 7.7%, to reach $102.52 per barrel, while West Texas Intermediate (WTI) jumped $7.65, or 7.9%, to $104.22 per barrel in early trading.
The rally comes after US President Donald Trump announced that the US Navy would begin enforcing a blockade on maritime traffic linked to Iran via the Strait of Hormuz. The move follows the collapse of negotiations between Washington and Tehran, raising fears of further disruption in global oil supplies.
According to United States Central Command, the blockade will target vessels entering or leaving Iranian ports, though ships transiting to non-Iranian destinations will not be affected. The development has significantly heightened uncertainty in global energy markets, as the Strait of Hormuz remains a crucial route for nearly a fifth of the world’s oil shipments.
Iran has responded strongly, with the Islamic Revolutionary Guard Corps warning that any hostile naval presence near its waters would face a decisive response. Analysts caution that the risk of miscalculation remains high, potentially leading to direct confrontation in the Gulf region.
Meanwhile, Organization of the Petroleum Exporting Countries has revised its global oil demand forecast downward by 500,000 barrels per day for the second quarter, citing the economic and geopolitical impact of the ongoing conflict. Despite this, physical crude prices have surged, with some grades trading at premiums nearing $150 per barrel.
Shipping activity has also been affected, with several oil tankers avoiding the Strait of Hormuz amid security concerns. However, a few supertankers managed to pass through the vital chokepoint over the weekend, indicating mixed market responses.
Energy experts believe oil prices may remain volatile in the coming weeks, especially as geopolitical developments unfold and supply concerns persist. The situation is expected to have wide-ranging implications for global inflation, fuel prices, and economic stability.
