Global oil markets remained on edge at the start of the week as escalating tensions in the Middle East triggered fresh volatility across energy markets, raising concerns about the stability of global crude supply.
The renewed uncertainty centres on the strategic Strait of Hormuz, one of the world’s most critical oil transit routes through which a significant portion of global crude shipments passes daily. Any disruption in the corridor is closely watched by traders because of its potential to quickly tighten global supply and push prices higher.
As at the time of writing (7:25am WAT), oil prices were fluctuating amid the heightened geopolitical risks. West Texas Intermediate crude was trading at about $98.86 per barrel, reflecting a 0.15 per cent increase, while Brent crude the global benchmark climbed to around $104.30 per barrel, up 1.11 per cent.
Market volatility intensified following a series of military developments involving the United States and Iran after reports that U.S. forces struck targets on Kharg Island, widely regarded as the centre of Iran’s crude oil export infrastructure. The development triggered warnings from Tehran and raised fears of further escalation across the Gulf region.
Tensions worsened over the weekend after a drone-related incident sparked a fire that temporarily halted oil loading operations at the Port of Fujairah in the United Arab Emirates, although operations later resumed. Additional attacks were also reported near key installations across the region, including areas around Baghdad International Airport.
Meanwhile, Japan has begun releasing crude oil from its strategic reserves to cushion potential supply disruptions, with about 80 million barrels expected to enter the market from government and private-sector stockpiles.
For oil traders, attention is now firmly fixed on tanker movements through the Strait of Hormuz and the broader security outlook in the Gulf, as any sustained disruption could send crude prices significantly higher in the coming weeks.