Oil prices have risen sharply for a second consecutive day, with West Texas Intermediate (WTI) nearing $93.00 per barrel and Brent crude trading around $96 per barrel, as severe disruptions in the Strait of Hormuz continue to impact global supply chains [1][2]. According to the Hormuz Strait Monitor, only 12 ships have crossed the waterway, compared to up to 140 per day before the conflict, representing less than 10% of normal traffic levels [1][2]. This de facto blockade has been attributed to ongoing geopolitical tensions, including a frail ceasefire deal involving Iran and continued hostilities between Israel and Lebanon [1][2].
US President Donald Trump criticized Iran's handling of the Strait, stating on Truth Social, 'That was not the agreement we had' [1]. Meanwhile, Iran has threatened strong responses if attacks on its ally Hezbollah continue, and has refused to participate in US-Iran peace talks until Israel halts its operations in Lebanon [1]. Israeli Prime Minister Benjamin Netanyahu confirmed authorization for direct talks with Lebanese authorities but maintained that operations against Hezbollah would persist [1].
Danske Bank's research team noted that Brent crude nearly reached $100 per barrel before dropping below $95 on news related to Israel-Lebanon, but subsequently rebounded to $96-97 per barrel [2]. The team also highlighted that Iran is directing vessels to transit near Larak Island due to mine risks and is reportedly considering imposing cryptocurrency-based transit tolls, a move strongly opposed by Western leaders and the International Maritime Organization [2].
Peace talks between the US and Iran, mediated by the Pakistani prime minister, are scheduled to begin on Saturday according to [2], while [1] reports the talks are expected to start on Tuesday, indicating a discrepancy in the timeline. Tensions remain high due to disagreements over the agenda, with Iran insisting on its ten-point plan, which White House Press Secretary Karoline Leavitt claims President Trump 'literally threw in the garbage' [2].
Investors remain on edge, with oil prices supported by the ongoing geopolitical risks. Markets are also shifting focus to the upcoming US Consumer Price Index (CPI) reading, expected to show inflation well above the Federal Reserve’s 2% target, potentially increasing pressure for further interest rate hikes this year [1].
CONCLUSION
The severe disruption of ship traffic through the Strait of Hormuz has driven oil prices higher, with both WTI and Brent crude supported by heightened geopolitical tensions and uncertainty around US-Iran peace talks. Market sentiment remains cautious as investors monitor both the evolving Middle East situation and key US inflation data for further direction.