Global oil markets have staged a powerful rally this week, with crude prices climbing more than 21 percent as escalating tensions in the Middle East threaten one of the world’s most critical energy supply routes.
The sharp surge, driven by disruptions around the Strait of Hormuz and mounting fears of supply shortages, has pushed oil prices to their highest level since April 2024 a period when geopolitical tensions and production cuts similarly tightened global supply.
By early Friday trading, Brent crude was hovering around $88.92 per barrel, while West Texas Intermediate (WTI) traded near $85.65 per barrel, according to data from Oilprice.com, as at the time of writing Brent crude was going for
$92.69 +8.52%. The gains come despite a brief pullback on Thursday after the United States signalled it may step into the market to calm surging prices.
Market rattled by supply disruptions
At the centre of the current rally is the Strait of Hormuz, the narrow maritime passage that carries roughly a fifth of the world’s oil supply. Severe disruptions to tanker traffic in the region have rattled traders and injected a fresh risk premium into crude markets.
With shipments slowing dramatically, concerns are growing that oil producers in the Middle East may soon struggle with excess supply that cannot reach international buyers.
Phillip Nova senior analyst Priyanka Sachdeva warned that prolonged disruptions could quickly ripple through the global energy system.
“With every passing day, halted activities in Hormuz will have two major impacts on oil the inability to store about 20 million barrels per day and the lack of flow to the world, which could drive global energy prices higher,” she said.
Early signs of strain are already emerging. Iraq has reportedly begun trimming production by about 1.5 million barrels per day, while Kuwait may soon follow if tanker traffic does not normalise within the next two weeks.
U.S. steps in to cool overheated market
In a move aimed at easing supply concerns, the U.S. Treasury Department announced plans to issue temporary sanction waivers allowing commodity trading firms to sell Russian crude currently stranded on tankers.
Roughly 9.5 million barrels could be released under the arrangement, with India expected to take delivery of the oil during a 30-day waiver window, according to reports.
While the measure may provide short-term relief, analysts say it does little to address the core issue unsettling the market.
Commodity strategists at ING noted that restoring normal shipping through the Strait of Hormuz remains the only sustainable path to easing oil prices.
“While this might help put some immediate downward pressure on the market, it is not a game changer,” the bank said. “The only way for prices to come down on a sustained basis is a resumption of oil flows through the Strait of Hormuz.”
For now, there are few signs that such a resolution is imminent.
Prices return to levels last seen in April 2024
The scale of the current rally has pushed oil prices back to levels last recorded in April 2024, when Brent crude briefly climbed above $90 per barrel.
That surge was fuelled by a mix of geopolitical risks, extended OPEC+ supply cuts, and drone attacks on Russian refineries that disrupted global fuel supply chains.
Today’s spike is unfolding under different circumstances but with a familiar trigger the market’s sensitivity to any threat to Middle Eastern oil flows.
With about 20 percent of global crude shipments passing through the Strait of Hormuz, even limited disruptions can send traders scrambling.
Global fuel markets on alert
The renewed strength in crude prices is already raising concerns across global energy markets, particularly for countries heavily reliant on imported refined products.
If the rally persists, higher crude prices could translate into rising fuel costs worldwide, putting fresh pressure on inflation and energy budgets.
For now, traders are watching developments in the Gulf closely. Any prolonged disruption to shipping lanes could push crude prices back above the $90 per barrel threshold a level that historically signals tightening supply and heightened volatility across the global oil market.