Oil prices climbed around 2% on Thursday as escalating geopolitical uncertainty surrounding a potential US–Iran ceasefire and continued disruption to maritime traffic through the Strait of Hormuz fuelled volatility across global energy markets.
Brent crude futures were trading at approximately $104 per barrel at 1015GMT, up more than 2% on the day, while West Texas Intermediate (WTI) rose to around $95, also recording gains of over 2%. The upward movement reflects growing market sensitivity to any developments affecting Middle Eastern supply routes, particularly amid concerns over the stability of one of the world’s most critical energy corridors.
The rally came as expectations of a rapid diplomatic breakthrough between Washington and Tehran faded, while shipping through the Strait of Hormuz remained constrained. The strategic waterway—through which roughly one-fifth of global petroleum consumption passes according to the US Energy Information Administration—continues to be a focal point of supply risk, reinforcing fears of broader disruptions in global energy flows.
Market sentiment was further unsettled by Iranian media reports suggesting that Tehran had collected its first toll payment for passage through the strait. According to Tasnim news agency, citing Iran’s deputy parliament speaker, the payment was received under a newly introduced arrangement, a development that has heightened concerns over tighter Iranian control of commercial navigation in the area.
Additional upward pressure on prices came from renewed warnings by the International Energy Agency (IEA), which highlighted the severity of the ongoing crisis. IEA Executive Director Fatih Birol described the situation as “the biggest energy security threat in history,” pointing to the combined impact of the Iran conflict and sustained disruptions in the Strait of Hormuz on global supply chains.
Speaking to CNBC at the Converge Live event in Singapore, Birol said the market has already lost around 13 million barrels per day of oil supply, alongside significant disruptions in other critical commodities. He noted that Europe, which traditionally sources about 75% of its jet fuel from Middle Eastern refineries, is now facing severe shortages and is turning to alternative suppliers such as the United States and Nigeria.
The continued volatility underscores the fragility of global energy markets amid rising geopolitical tensions in a region that remains central to international oil and gas flows.
