Oil prices swung sharply throughout the past week as traders reacted to the escalating conflict with Iran, briefly surging to around $120 per barrel before retreating and then climbing again as concerns about shipping through the Strait of Hormuz continued to toss global energy markets.
The volatility reflects fears that fighting in the Middle East could disrupt oil shipments through the strategic waterway between Iran and Oman. Roughly one-fifth of the world’s oil supply passes through the Strait of Hormuz, making it one of the most important chokepoints in the global energy supply chain.
The swings have already begun filtering into U.S. gasoline markets, with Washington officials warning that higher crude prices could push pump prices upward in the coming weeks if the conflict continues.
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Prices first spiked late Sunday into early Monday as markets opened for the week. Benchmark Brent Crude jumped as high as $120 a barrel, the highest level since 2022, as investors feared the conflict could disrupt oil tanker traffic through the gulf.
The spike came as fighting intensified and Iran threatened commercial vessels near the Strait of Hormuz. Tehran pushed out a message that said to prepare for oil to cost $200 per barrel.
Energy traders quickly priced in the possibility that oil flow through the crucial waterway could be halted or significantly reduced.
Prices then dropped sharply later Monday and into Tuesday after signals from Washington suggested the conflict might not immediately disrupt supply as much as initially feared.
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Brent crude fell back toward the $90 range, with markets reacting to comments from President Donald Trump indicating the war could end soon and that the U.S. military had largely achieved its objectives.
The decline reflected a familiar pattern in oil markets: prices often spike on geopolitical risk but fall if traders conclude that actual supply has not been significantly disrupted.
However, the dip did not last long.
By midweek, oil prices began climbing again after reports of Iranian attacks on commercial ships near the Strait of Hormuz raised new concerns about supply. Brent crude climbed back above $100 per barrel, while U.S. benchmark West Texas Intermediate crude approached about $95 per barrel.
Those attacks reinforced fears that even limited disruption in the Persian Gulf could drive prices higher.
For the remainder of the week, Brent crude largely hovered between roughly $100 and $110 per barrel, reflecting persistent uncertainty about whether the conflict could escalate further or disrupt tanker traffic through the region.
Governments and international organizations have begun taking steps to stabilize markets. The International Energy Agency announced plans to release hundreds of millions of barrels from strategic oil reserves to offset potential disruptions and calm markets.
Traders will be watching whether tanker traffic through the Strait of Hormuz remains stable, whether naval escorts are introduced to protect shipping, and whether Iran carries out additional attacks on energy infrastructure.
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Transportation Secretary Sean Duffy said Sunday that insurance is “ready to go” for ships traveling through the strait, but the Pentagon will still need to get security details set. Duffy said it could be anywhere from one day to a week before measures are in place to secure oil flow.
Even small changes in shipping through the gulf could have major effects on oil prices because of the region’s central role in global supply.
