Global Markets Volatile as Oil Prices Hover Near $95 Amid Strait of Hormuz Tensions
Oil markets remain on edge as US-Iran hostilities intensify, sparking fears over the stability of one of the world’s most critical energy transit routes.
Crude oil prices experienced a slight retreat during Thursday’s trading session, following a period of intense volatility as investors recalibrated their portfolios in response to escalating military tensions in the Middle East. Despite the slight dip, global benchmarks continue to trade above the $95-per-barrel mark, driven by persistent concerns surrounding the security of shipping lanes in the Strait of Hormuz.
As of 7:30 am IST, Brent crude was trading down 30 cents, or 0.31%, at $95.33 per barrel. Simultaneously, West Texas Intermediate (WTI) slipped 13 cents, or 0.14%, to $90.88 per barrel.
Escalation in the Strait of Hormuz
The market’s primary focus remains on the Strait of Hormuz, a narrow waterway through which approximately one-fifth of the world’s oil and liquefied natural gas (LNG) is typically transported. Shipping activity through the strait has plummeted; preliminary data from Kpler indicates that only four commodity vessels navigated the waterway on Wednesday, a significant drop from the 10-day average of roughly 13 ships.
The situation has been exacerbated by the Islamic Revolutionary Guard Corps (IRGC), which warned that ongoing US military operations would further restrict transit. Iran has intensified its stance, expanding its list of “non-compliant” vessels subject to potential fines, detention, or confiscation. Reports from Iranian state media claimed that two oil tankers were disabled on Wednesday after being struck by sea mines while attempting to transit the region.
A Heightened US-Iran Conflict
The latest military exchanges mark the most significant flare-up between Washington and Tehran since July. In the seventh month of the conflict, US forces targeted Iranian radar and missile infrastructure along the southern coast, while Iran retaliated with strikes on American bases throughout the region.
President Donald Trump addressed the surge in hostilities on Wednesday, asserting that the US is prepared for further action if necessary. “We took out all of the new equipment that they tried to build along the Strait of Hormuz… It was a very heavy attack last night, and we’re prepared to do another one any time we want,” the President stated, though he added that the current campaign is not expected to be protracted.
Contradicting the narrative of a total shipping freeze, the US government reported that 17 million barrels of oil successfully transited the strait on Monday—the highest volume observed since the conflict began.
Global Supply Concerns
The unpredictability of the region has sent shockwaves through energy markets, leading to extreme price swings. During Wednesday’s session, both Brent and WTI saw fluctuations of up to $2 per barrel before settling, with Brent eventually closing 1% higher.
As the geopolitical situation remains fluid, nations worldwide are scrambling to secure energy security. Efforts to source alternative supplies and utilize strategic reserves are underway, though those reserves are reportedly dwindling. With the high stakes surrounding current oil price today, analysts suggest that markets will likely remain hyper-sensitive to any further military or maritime developments in the Middle East.
