Global oil prices climbed on Friday as renewed fears of escalation in the Middle East gripped markets. The surge followed Iran releasing footage of commandos boarding a cargo ship in the Strait of Hormuz and reports of heightened military activity in Tehran.
Price Movements
Brent crude futures rose by $1.23, or 1.17%, to $106.3 per barrel in early trading, while West Texas Intermediate (WTI) increased by $1.07, or 1.12%, to $96.92, according to Reuters. Both benchmarks had already surged more than 3% in the previous session, reflecting mounting geopolitical risk premiums tied to the ongoing Iran conflict.
Market Reaction to Escalation Fears
Investor sentiment weakened after reports suggested Iranian air defenses had engaged "hostile targets" over Tehran, alongside signs of internal power tensions within the country, as per Reuters. US President Donald Trump stated that Iran may have reinforced its military capability during the ceasefire period, though he claimed US forces could neutralize it quickly. "The US military could eliminate it in just a single day," he said.
Strait of Hormuz Remains Key Flashpoint
Iran also released video showing commandos storming a large cargo vessel using speedboats, reinforcing its control over the Strait of Hormuz, through which roughly 20% of global oil and gas flows. Analysts warned that prolonged disruption in the region could sharply tighten global supply. Mingyu Gao of China Futures noted that inventories could fall below five-year seasonal lows by late May or early June if tensions persist, adding a fresh risk premium to oil prices.
Haitong Futures observed that the current ceasefire phase increasingly appears to be a "preparatory phase for war," with risks of further escalation if diplomatic talks fail to progress by the end of April, as per Reuters. Trump, meanwhile, said he would not set a deadline for negotiations, stating, "Don't rush me," when asked about a long-term peace deal.
In a separate development, Israel and Lebanon agreed to extend their ceasefire following discussions in Washington, even as Israel warned it remained prepared to resume operations against Iran.
With maritime security, diplomatic negotiations, and military posturing all converging, oil markets remain highly sensitive to developments in the region, keeping prices volatile and investor caution elevated.
