Global energy markets opened sharply higher after a weekend escalation between the US and Iran rattled supply expectations. Benchmark crude prices surged, with Brent crude rising to around $96 per barrel and US WTI climbing above $90 per barrel, marking gains of over 6% each. Natural gas markets mirrored the move, with European prices jumping as much as 11% amid fears of prolonged disruption in energy flows.
The latest spike follows a dramatic reversal in sentiment. Oil prices had plunged nearly 9% late last week after Iran signalled a reopening of the Strait of Hormuz, briefly easing supply concerns. However, that optimism quickly faded. Tehran walked back its decision within 24 hours, citing continued US naval pressure, and tensions escalated after Iranian forces reportedly targeted vessels in the region. The US, in turn, confirmed the seizure of an Iranian-flagged cargo ship attempting to bypass its blockade.
ALSO READ: Iran Reasserts Control Over Strait Of Hormuz As Shipping Comes To A Standstill
The Strait of Hormuz — a critical route that typically carries about one-fifth of global oil and LNG trade — is once again at the centre of the crisis. Shipping activity has effectively stalled, with multiple tankers turning back and no confirmed crossings over the weekend. The disruption has amplified fears of a tightening global supply, pushing traders to price in a fresh geopolitical risk premium.
Uncertainty also clouds the diplomatic front. While Washington has indicated openness to talks, Iran has downplayed the likelihood of any breakthrough. Planned negotiations in Islamabad this week remain in doubt, with conflicting signals from both sides on participation. Beyond the immediate standoff, unresolved issues — including Iran's nuclear programme and wider regional conflicts — continue to complicate any path to de-escalation.
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