Global oil markets surged on Thursday as Brent crude climbed to a four-year high, amid escalating geopolitical tensions following reports that the US military is preparing to brief Donald Trump on potential action against Iran.
According to Axios, the United States Central Command is set to present the US President with options for possible military intervention, citing sources familiar with the matter. The development has heightened fears of renewed conflict in the Middle East, particularly as an ongoing US blockade continues to restrict Iranian oil exports.
Market data shows June futures for international benchmark Brent crude surged by 6.84 per cent to $126.10 per barrel, while West Texas Intermediate rose 3.14 per cent to $110.24. According to LSEG data, Brent has now reached its highest level since early 2022, driven largely by tightening supply conditions linked to the regional crisis.
The supply squeeze has been exacerbated by disruptions at the critical Strait of Hormuz, a vital transit route for global oil shipments. Analysts at Goldman Sachs estimate that exports through the chokepoint have dropped to just four per cent of normal levels, reflecting the combined impact of the blockade and stalled negotiations between Washington and Tehran.
The report also noted that constrained Iranian exports, coupled with limited storage capacity, could worsen supply shortages if the blockade persists. While increased production from the United Arab Emirates following its exit from OPEC may offer some relief, analysts say such gains are unlikely to offset near-term market tightness.
Tensions were further inflamed by remarks from Trump, who issued a stern warning to Iran in a post on Truth Social.
“Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon!” Trump said.
The post, which featured an AI-generated image of the US President holding a weapon against a backdrop of explosions with the caption “NO MORE MR. NICE GUY!”, underscored the increasingly combative tone of US rhetoric.
Reacting to the developments, Bill Perkins, Chief Investment Officer at Skylar Capital Management, said oil markets are currently being driven by a complex mix of physical supply disruptions, geopolitical uncertainty, and investor sentiment.
“We’re kind of far apart from a deal, and maybe hostilities or a little bit more time is [needed] to open up the Strait of Hormuz,” Perkins said.
He added that while strategic reserves and crude already in transit have helped cushion price spikes, refined product markets remain under severe strain.
“There are sharp increases in diesel prices and ongoing logistical bottlenecks, even if a ceasefire is reached,” he noted.
Despite the bullish price environment, Goldman Sachs has warned of emerging risks to global demand. The bank estimates that oil consumption in April may be approximately 3.6 million barrels per day lower than February levels, with declines most evident in jet fuel and petrochemical feedstocks.
Looking ahead, Perkins cautioned that prices could climb even higher if disruptions continue.
“Oil could spike toward $140–$150 a barrel if disruptions persist,” he said, adding that sustained high prices would eventually dampen demand.
Boluwatife Enome
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