Crude oil prices climbed to their highest level in six weeks, driven by escalating tensions and a direct exchange of strikes against oil assets between the United States and Iran. The Brent benchmark closed at USD 97.31 per barrel, while West Texas Intermediate (WTI) advanced to USD 92.65 per barrel, marking their strongest levels since July 24.
Oil Prices Surge Amid Exchange of Attacks Between US and Iran
The latest upward pressure on energy markets followed threats from Iran to target energy infrastructure across the Middle East in retaliation for new United States bombings against Iranian assets. Mohammad Baqer Qalibaf, the speaker of the Iranian parliament, issued a warning stating that any attack on Iranian assets would be met with a counter-attack. The statement followed remarks from United States Secretary of Defense Pete Hegseth, who had described Tehran’s tanker fleet as “defenceless.”
Escalation Involves Tankers and Regional Infrastructure
Maritime intelligence firm Marisks reported that the United States and Iran exchanged attacks involving oil tankers and warships over the weekend. The firm noted a significant shift in the nature of the conflict, stating that commercial tankers are now being utilized deliberately as instruments of reciprocal economic pressure, thereby blurring the distinction between military confrontation and commercial transit.
The conflict, which originated when Washington and Israel launched initial bombings on Iranian territory on February 28, has severely disrupted commercial shipping. According to the United Nations Conference on Trade and Development (UNCTAD), traffic through the strategic Strait of Hormuz plunged after an Iranian military blockade was implemented, contrasting sharply with an average of 129 vessels per day that transited the waterway between February 1 and February 27.
In addition to maritime clashes, regional infrastructure came under direct fire. A petroleum refinery operated by Saudi Aramco in Jazan, Arabia Saudita, was attacked, with damages currently under evaluation according to reports. Meanwhile, Israeli airstrikes in southern Lebanon resulted in at least 12 deaths, marking one of the deadliest single days of bombardment in recent weeks.
Global Energy Market Transformations and Supply Shifts
The prolonged conflict has fundamentally reshaped global energy dynamics and trade routes. Prior to the war, approximately one-fifth of the world’s petroleum circulated normally through the Strait of Hormuz, but Iran’s de facto closure of the passage removed roughly 13 million barrels per day of oil supply from the global market.
To compensate for the severe supply disruption, non-Middle Eastern producers significantly increased output. According to market analyses, Brazil added about 800,000 barrels per day, Guyana incorporated 300,000, Canada added 200,000, and Norway contributed an additional 150,000 barrels per day. The United States produced approximately 900,000 barrels per day more than the previous year. Gulf producers also sought alternative transport routes, with Saudi Arabia maximizing its East-West land pipeline and Iraq analyzing a potential connection toward the Mediterranean.
On the demand side, China demonstrated a capacity to absorb energy shocks by utilizing accumulated reserves and reducing crude imports by around 5 million barrels per day. RSM US chief economist Joe Brusuelas highlighted Beijing’s ability to rapidly modulate its demand, a process accelerated by a transition toward electric vehicles. Natasha Kaneva, head of commodities analysis at JP Morgan, noted that the permanent risk of disruptions in the Strait of Hormuz could add a permanent transit cost of approximately $1 per barrel to global oil prices.
Diplomatic Stalemate and Political Pressures
More than six months after the onset of hostilities, the conflict has generated widespread economic inflation and political fallout. In the United States, gasoline and distillate fuel inventories remain well below levels from the previous year and below the five-year seasonal average. Domestically, public support for military action has dropped, with a Reuters/Ipsos poll showing that only 31% of Americans support the military campaign against Iran, down from 37% in March.
Diplomatic channels between Washington and Tehran remain stalled. Although intermediaries such as Qatar and Pakistan continue pushing for a diplomatic resolution, indirect communication lines that previously facilitated de-escalation have largely broken down as both nations remain entrenched in a prolonged strategic standoff.
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