Global oil prices steep weekly gains as the closure of the Strait of Hormuz deepened supply fears across energy markets, pushing Brent crude to nearly $110 per barrel.
As of the time of writing, 4:30pm WAT, Brent crude had moved from $102 per barrel earlier in the week to above $109 per barrel, as traders continued to price in the growing threat of a prolonged disruption to international crude flows.
The shutdown of the Strait of Hormuz, through which roughly a fifth of the world's seaborne crude passes, remained the dominant market force. The waterway has been largely inaccessible since fighting between the United States and Iran escalated in late February, severing a critical artery for Gulf oil exports.
OPEC+ production increases announced in recent weeks have offered little relief. With the routing problem centred on access rather than output, additional barrels have been unable to reach buyers efficiently, leaving the supply deficit intact.
Freight costs have risen sharply as shippers diverted cargoes away from the Gulf and around the African coast. The longer voyage times have reduced the speed at which crude reaches refiners, tightening near-term availability and sustaining upward pressure on futures.
Inventory data reinforced the bullish picture. The US Energy Information Administration reported a larger-than-expected decline in commercial crude stocks, with reserves at the Cushing, Oklahoma hub falling steeply. Gasoline supplies also tightened as buyers sought alternatives to Gulf-sourced fuel.
The International Energy Agency cautioned that continued disruption could produce significant supply deficits through the rest of 2026, warning that global stockpiles have already been declining for several months. OPEC trimmed its demand growth projections, citing early signs of consumption slowdown driven by elevated energy costs, though the supply shock continues to dominate market direction.
Prices are expected to remain volatile. A diplomatic resolution that restores normal passage through the Strait could trigger a sharp correction, but absent that, the supply premium built into current prices looks set to hold.