LONDON – Brent crude futures surged toward $120 per barrel on Thursday for the first time in a decade as the prolonged Iran-US conflict and continued closure of the Strait of Hormuz kept global energy markets on edge .
Brent, the international benchmark, climbed 5% to trade near 119.50perbarrel–thehighestlevelsince2016.WestTexasIntermediate,theUSbenchmark,alsorose,tradingaround116.87 per barrel .
The sharp price acceleration follows weeks of supply disruptions after Iran closed the strategic Strait of Hormuz, a chokepoint through which approximately 20% of global oil – about 17 million barrels per day – typically passes . Traders are increasingly pricing in a scenario where the waterway remains shut for months rather than weeks .
Adding to the uncertainty, the United Arab Emirates announced this week that it will withdraw from OPEC and the wider OPEC+ alliance effective May 1 . The exit of the cartel’s third-largest producer – currently pumping approximately 3.5 million barrels daily with plans to raise capacity to 5 million bpd – has further rattled traders already grappling with severe supply shortages .
Tanker tracking data indicates that virtually no oil is moving through the Strait of Hormuz, effectively stripping the global market of over 10 million barrels per day in combined supply from Iran, the UAE, Saudi Arabia, Kuwait and Qatar .
Rising energy costs have injected additional pressure into US-Iran peace negotiations, which remain stalled as Iran consults with its Supreme Leader before presenting a revised proposal to Washington . Analysts warn that failure to reopen the strait soon could drive Brent above $150 per barrel, triggering a global recession
