Crude oil prices have climbed above $101 per barrel as renewed fighting between Iran and the United States continues to disrupt shipping around the strategically important Strait of Hormuz, raising fresh concerns about global energy supplies.
Brent crude, the international benchmark, settled at $101.21 per barrel on Wednesday after rising 3.4 per cent, while US West Texas Intermediate crude gained 3.25 per cent to $96.05. Brent has since remained above the $100 mark amid continuing supply concerns.
The latest rally reflects growing fears that prolonged hostilities could further restrict the movement of crude oil and refined petroleum products through the Gulf. The Strait of Hormuz previously handled roughly one-fifth of global oil and gas supplies, making disruptions there particularly significant for energy markets.
Oil prices have also been supported by attacks on shipping and energy infrastructure in the region. Iranian authorities said they had attacked several ships near the strait, while US forces have carried out strikes against Iranian-linked tankers. Houthi attacks on Saudi energy facilities have added another layer of uncertainty to regional oil supplies.
Analysts have warned that the market could remain highly volatile as traders assess the duration and extent of the supply disruptions. UBS energy analyst Giovanni Staunovo said near-term risks remained tilted to the upside, while warning that significant price volatility should be expected.
The surge is important for oil-producing countries such as Nigeria because higher international crude prices can increase government oil revenues but may also raise the cost of imported refined petroleum products and add to inflationary pressures.
For consumers worldwide, sustained high crude prices could translate into more expensive petrol, diesel, aviation fuel and transportation, with possible knock-on effects on food and other goods.
The Strait of Hormuz remains central to the global energy market. With shipping activity still significantly below pre-conflict levels, investors will continue watching diplomatic and military developments closely for signs of either further disruption or a return to more stable oil flows.
