The global oil market has experienced a significant surge, with crude oil prices now surpassing $120 per barrel. This rise marks the highest level since 2022, raising concerns about supply shortages. Tensions between the US and Iran, along with a standstill on the nuclear deal, have destabilized the market, leading experts to predict that prices could rise further if conditions do not improve.
US-Iran Tensions and Hormuz Strait Crisis
The sharp increase in oil prices is primarily driven by the escalating tensions between the US and Iran. The US has imposed stricter measures on Iran’s oil exports, and the ongoing stalemate over the Hormuz Strait further complicates the situation. This critical passage, which handles a significant portion of global oil supply, has become a focal point in the energy crisis.
On April 30, Brent crude for June delivery surged by nearly 1.96%, reaching $120 per barrel. Meanwhile, the US West Texas Intermediate (WTI) also maintained levels above $107. This came after a strong market rally earlier in the week, where Brent crude rose by 6% and WTI jumped by 7%.
Market Outlook
Experts warn that if the US continues to restrict Iran’s oil exports and storage capacity remains limited, the supply situation could worsen. While the UAE is attempting to increase production by leaving OPEC, its impact will take time to materialize. Looking ahead, several institutions have cautioned that if the US-Iran negotiations stall and tensions rise, crude oil prices could reach $150 per barrel.
The extended closure of the Hormuz Strait could be a major blow to the global market. This vital route carries approximately 20 million barrels of oil per day. Any disruption in this passage would directly push prices higher, further exacerbating the supply crisis.
