Brent crude climbed above $90 a barrel for the first time this year as escalating tensions between the United States and Iran heightened fears of supply disruptions in the Middle East.
Brent futures rose more than 5% to trade above the $90 mark, while US West Texas Intermediate crude also recorded strong gains as investors reacted to growing geopolitical uncertainty around the Strait of Hormuz.
The waterway carries about one-fifth of the world’s oil supply, making it one of the most strategically important energy routes globally.
Market sentiment deteriorated after reports of increased military activity involving US and Iranian forces, fuelling concerns that the conflict could disrupt crude shipments from the Gulf. Although there has been no confirmed closure of the Strait of Hormuz, traders moved quickly to price in the risk of supply interruptions and higher transportation costs.
Analysts said the latest rally reflected a growing geopolitical risk premium rather than an immediate shortage of physical supplies. Insurance costs for tankers operating in the region have risen, while shipping companies are closely monitoring developments before deciding whether to reroute vessels or reduce operations through the strait.
The price surge comes despite recent efforts by OPEC+ to increase oil production. The alliance has gradually restored output in recent months to meet stronger global demand, but market participants believe any significant disruption to exports from the Gulf could outweigh additional supplies from producers.
Higher crude prices are expected to increase fuel costs worldwide, adding pressure on inflation at a time when many central banks have only recently begun lowering interest rates. Rising energy costs also threaten to increase transportation, manufacturing and food prices, potentially slowing economic growth in both advanced and emerging economies.
Oil-importing countries are likely to face the greatest impact if elevated prices persist. Higher import bills could widen trade deficits, weaken local currencies and increase pressure on government budgets, particularly in developing economies that remain heavily dependent on imported petroleum products.
For oil-exporting nations, however, sustained higher prices could boost export earnings and strengthen public finances. Producers across the Middle East and Africa stand to benefit from stronger revenues, although prolonged regional instability could also disrupt production, investment and shipping activities.
Financial markets are expected to remain volatile as investors monitor developments in the Middle East. Any signs of de-escalation could ease pressure on oil prices, while further military confrontation between the United States and Iran could trigger another sharp rally.
With the Strait of Hormuz remaining central to global energy trade, analysts say geopolitical developments rather than market fundamentals are likely to drive crude prices in the near term. The trajectory of the conflict will determine whether Brent remains above $90 or retreats as concerns over supply disruptions begin to ease.
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Emmanuel Abara Benson is a business journalist and editor covering artificial intelligence, global markets, and emerging technology.
He has previously worked with Business Insider Africa and Nairametrics, reporting on finance, startups, and innovation.
His work focuses on AI, digital economy, and global tech trends.
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