Iran Threats Spark Oil Price Spike as Strait of Hormuz Risk Returns
Crude oil prices surged at the start of the week as tensions between the US and Iran escalated, raising concerns about disruptions to oil shipments through the Strait of Hormuz.
The WTI crude price opened above $92, creating a bullish gap, while Brent crude also opened higher near $97, testing its 100-day moving average.
The recent rally in oil prices has been driven by rising tensions with Iran, stronger US sanctions pressure, declining global inventories, and concerns over refined-product supplies.
Iran has warned that it could declare a restricted zone outside the Strait of Hormuz within days, placing ships entering the area on a sanctions list.
The potential threat to commercial shipping has raised the geopolitical risk premium in crude oil, with any prolonged disruption through Hormuz sending oil prices substantially higher and increasing global inflation pressures.