Nicolai Haugsted
Oil prices spike again, and gas has become even more expensive.
Energy markets woke up to another jolt on Thursday as tensions in the Middle East pushed oil prices sharply higher and renewed concerns about global supply.
According to Reuters, investors are once again watching the Strait of Hormuz, one of the world’s most important energy corridors, after Iran announced it was closing the waterway following fresh U.S. military strikes. The development sent crude prices climbing as traders weighed the risk of further disruption to global oil shipments.
Critical route under pressure
The Strait of Hormuz is one of the most strategically important waterways on the planet. Roughly a fifth of the world’s oil and gas exports normally pass through the narrow passage connecting the Persian Gulf to international markets.
Iran’s top military command said Thursday that the strait had been closed to oil tankers and commercial vessels, warning that ships attempting to pass would come under fire.
Markets reacted immediately.
Brent crude rose above $94 per barrel, while U.S. crude climbed past $91, extending gains after several days of escalating military activity in the region.
Analysts at ING said the latest developments suggest a resolution remains distant.
“It once again suggests a deal is still some way off and that energy flows from the Persian Gulf will remain heavily constrained.”
Trump escalates pressure
Fresh market anxiety followed additional U.S. strikes against targets inside Iran.
President Donald Trump signaled that military action could continue unless Tehran agrees to a deal with Washington.
Speaking to Fox News reporter Trey Yingst, Trump warned:
“bomb the shit out of them”
The president said the latest attacks would end shortly but made clear that further action remains on the table if negotiations fail.
Military activity marks another escalation in a conflict that had briefly cooled following a fragile ceasefire reached earlier this year.
Supply concerns grow
Oil traders are increasingly focused on supply risks rather than short-term price swings.
Shipping through the Strait of Hormuz has already been heavily disrupted for months, limiting exports from several major producers across the Gulf.
Compounding those concerns, U.S. crude inventories have been falling rapidly.
Government data released Wednesday showed American stockpiles dropped by 7.2 million barrels during the latest reporting period, significantly more than analysts had expected.
Since fighting intensified earlier this year, U.S. inventories have reportedly declined by roughly 79 million barrels as producers and governments attempted to compensate for reduced flows from the Gulf region.
OPEC output hits multi-decade low
Pressure on global supplies is not coming from Hormuz alone.
A Reuters survey found that OPEC production fell in May to its lowest level in more than twenty years. Restrictions affecting Iranian exports and reduced shipments from other Gulf producers have tightened the market further.
Meanwhile, conflicting reports continue to emerge from the region.
Iranian state media claimed U.S. naval assets near Hormuz had been targeted by missiles and drones. U.S. officials said commercial shipping was still moving through parts of the strait and reported no successful attacks on American warships.
For energy markets, however, the broader concern remains unchanged: as long as the conflict continues and one of the world’s most important oil routes remains under threat, traders are likely to keep pricing in the possibility of further supply disruptions.
