BY COMFORT OGBONNA
Global oil prices continued their upward surge on Thursday, rising by more than $1 as tensions between Iran and the United States showed no signs of easing. The lack of progress in peace negotiations, combined with ongoing restrictions on shipping through the critical Strait of Hormuz, has intensified concerns about global supply disruptions.
Brent crude climbed by $1.26, or 1.2%, to reach $103.17 per barrel, marking its first move above the $100 threshold in over two weeks. Meanwhile, U.S. West Texas Intermediate (WTI) crude rose by $1.20, or 1.3%, to $94.16 per barrel. The gains build on strong momentum from the previous day, when both benchmarks jumped more than $3 amid tightening fuel inventories and escalating geopolitical risks.
Market analysts say the oil market is rapidly adjusting to the growing uncertainty in the Persian Gulf region. With negotiations between Iran and the United States stalled, expectations for a near-term resolution are fading. The situation worsened after Iran seized two vessels attempting to pass through the Strait of Hormuz, signaling that disruptions to global oil shipments could persist.
The Strait of Hormuz remains one of the world’s most vital energy corridors, historically accounting for roughly 20% of global daily oil shipments. Since hostilities began earlier this year, both nations have imposed restrictions on maritime traffic through the waterway, significantly reducing the flow of crude oil to international markets.
Although U.S. President Donald Trump recently extended a temporary ceasefire following mediation efforts by Pakistan, tensions remain high. Iran has insisted that any lasting ceasefire must include the removal of the U.S. naval blockade currently limiting its oil exports. Iranian parliamentary speaker Mohammad Baqer Qalibaf reinforced this stance, emphasizing that meaningful peace depends on restoring unrestricted trade.
Adding to the strain, U.S. military forces have intercepted several Iranian-flagged oil tankers in Asian waters, redirecting them away from key trading routes near India, Malaysia, and Sri Lanka. These actions have further complicated global shipping logistics and heightened fears of prolonged supply instability.
Despite earlier warnings of potential military escalation, including threats to target Iranian infrastructure, the U.S. administration has so far refrained from direct conflict. The ceasefire extension remains open-ended, with no clear timeline for a permanent resolution, leaving markets on edge.
At the same time, the United States is stepping up its role as a major energy supplier. Total exports of crude oil and refined petroleum products rose by 137,000 barrels per day, reaching a record 12.88 million barrels per day. Increased demand from Europe and Asia—driven by supply shortages linked to the ongoing conflict—has fueled this surge in exports.
However, domestic inventory data presents a mixed picture. According to the U.S. Energy Information Administration, crude oil stockpiles increased by 1.9 million barrels, defying expectations of a decline. In contrast, gasoline inventories dropped sharply by 4.6 million barrels, far exceeding forecasts, while distillate stocks fell by 3.4 million barrels, also surpassing expectations.
The sharp decline in fuel inventories, particularly gasoline and distillates, suggests strong consumption levels and tightening supply conditions, both of which are contributing to upward pressure on prices.
As geopolitical tensions persist and supply chains remain under strain, oil markets are likely to stay volatile. Investors and policymakers alike are closely watching developments in the Persian Gulf, where any further escalation—or breakthrough in negotiations—could significantly influence global energy prices in the weeks ahead.