Oil prices climbed sharply as efforts to revive peace talks between the US and Iran faltered, leaving the Strait of Hormuz effectively shut and deepening a global supply crunch. Brent crude for June settlement rose 2.2% to $107.66 a barrel, after touching an intraday high of $107.97, while WTI for June delivery gained 2.2% to $96.47, holding near multi-month highs.
The continued closure of Hormuz — a critical artery that typically carries about a fifth of global oil flows — has pushed markets into uncharted territory. Daily ship transits through the strait have dropped to near zero as both US and Iranian forces enforce competing blockades. The disruption is no longer limited to crude. Supplies of fuel, natural gas and even fertilizers have been hit, amplifying concerns of a broader inflationary shock across economies.
Hopes of a breakthrough dimmed after US President Donald Trump called off a planned visit by senior envoys to Pakistan, which has been mediating talks. Trump indicated that Iran's proposals fell short, while Tehran maintained it would not engage under pressure. Iranian President Masoud Pezeshkian said negotiations cannot proceed under “threats or blockade,” signalling a widening impasse.
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Now in its ninth week, the conflict is beginning to bite across global markets. Shortages of key fuels such as liquefied petroleum gas have already surfaced in countries like India, while airlines are cutting routes amid rising costs. The scale of disruption is significant. Traders estimate that supply has already dropped by at least 10%, with potential losses running into hundreds of millions of barrels. The International Energy Agency has warned that the الأزمة could mark one of the largest supply shocks on record.
The US has stepped up enforcement of the blockade, intercepting vessels and redirecting shipments. Military data indicates dozens of ships have already been turned back since the start of the standoff. At the same time, Washington is tightening financial pressure, targeting refiners linked to Iranian crude flows — particularly in China, where smaller independent processors continue to buy discounted barrels.
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