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Energy Markets · Geopolitics · Inflation · Oil Prices
Oil prices experienced extreme volatility, initially surging about 7% to their highest settlement since August 2022, with Brent reaching $98.96 and WTI $94.77.
Intraday peaks hit $119.50 for Brent and $119.48 for WTI, comparable to June 2022 highs. This spike was driven by the U.S.-Israeli war with Iran, the virtual closure of the Strait of Hormuz (a critical passage for one-fifth of global oil and LNG), and significant supply cuts by OPEC members including Saudi Arabia, UAE, Iraq, Kuwait, and Qatar.
However, prices sharply reversed post-settlement, dropping over 5% after news of a phone call between U.S. President Trump and Russian President Putin, and reports that the Trump administration was considering easing sanctions on Russian oil. Other factors contributing to the retreat included fears of soaring inflation, potential coordinated releases from strategic petroleum reserves by G7 nations, and profit-taking in an overbought market.
The crisis has already led to higher airfares, hammered airline stocks, and prompted countries like Pakistan and Hungary to implement measures to curb fuel use and cap prices.
