BY COMFORT OGBONNA
Oil prices climbed sharply at the start of the week, reflecting renewed anxiety in global energy markets as tensions between the United States and Iran intensified. The rebound followed fresh concerns that a fragile ceasefire could unravel after the U.S. seized an Iranian cargo ship, raising fears of retaliation and further disruption to already strained oil supplies.
Global benchmark Brent Crude jumped by more than 5%, rising $4.81 to $95.19 per barrel in early trading, while West Texas Intermediate gained $4.96 to reach $88.81 per barrel. The surge marked a sharp reversal from the previous session, when both benchmarks had plunged about 9% amid optimism that shipping routes would remain open during the ceasefire period.
That optimism has quickly faded. While Iran had earlier indicated that commercial vessels could pass through the Strait of Hormuz without obstruction, reports of renewed attacks on tankers have unsettled shipping companies and traders alike. The strait is one of the most critical chokepoints in global energy supply, historically accounting for roughly one-fifth of the world’s oil shipments. Any disruption there has immediate and far-reaching consequences for global prices.
Market participants are increasingly concerned that the situation on the ground does not match official assurances. Despite statements suggesting safe passage, incidents involving vessels have raised doubts about whether shipping through the strait can truly resume in a stable and predictable way. As a result, many ship owners are hesitant to re-enter the المنطقة without stronger guarantees of safety, effectively keeping a significant portion of oil flows offline.
Adding to the tension, the United States confirmed it had seized an Iranian cargo ship that allegedly attempted to breach its blockade. Iran responded with warnings of retaliation, fueling speculation that hostilities could escalate once again. Compounding the uncertainty, Tehran has indicated it will not take part in a second round of negotiations that had been anticipated before the ceasefire expires, further diminishing hopes for a diplomatic resolution in the near term.
The standoff has had a direct impact on supply. Analysts estimate that between 10 to 11 million barrels of crude oil per day remain shut in due to the ongoing disruptions. This tightening of supply comes at a time when global demand remains relatively firm, creating a mismatch that is pushing prices higher and increasing volatility across energy markets.
The broader geopolitical environment has also made price movements more erratic. Oil markets have been reacting not only to physical supply constraints but also to rapidly changing headlines and statements from both sides. This has created a pattern of sharp swings, with prices rising or falling dramatically in response to new developments, even when underlying conditions remain largely unchanged.
Despite the uncertainty, there have been small signs of activity resuming. Data showed that more than 20 vessels passed through the Strait of Hormuz on Saturday, carrying a mix of oil, liquefied petroleum gas, metals, and fertilizers. This represented the highest level of traffic through the waterway in weeks, suggesting that some operators are cautiously testing the situation. However, the overall flow remains far below normal levels, and confidence has yet to fully return.
For now, the oil market remains highly sensitive to geopolitical developments. With the ceasefire nearing its expiration and both sides taking increasingly assertive actions, the risk of renewed conflict continues to loom. Until there is greater clarity and stability in the region, energy prices are likely to remain volatile, reflecting the fragile balance between supply disruptions and shifting political dynamics.