Energy markets brace for prolonged conflict as Hormuz disruptions threaten global supply
MARKET INSIDER – Oil prices remained elevated near the $100 mark Friday as the war involving United States, Israel, and Iran approached its third week, fueling fears of a prolonged global energy shock.
The global benchmark Brent crude traded around $99 per barrel, while West Texas Intermediate hovered near $94. Despite slight pullbacks during the session, crude prices remain sharply higher after surging nearly 28% last week—one of the biggest weekly increases since the COVID‑19 pandemic disrupted energy markets in 2020.
Market volatility reflects escalating geopolitical uncertainty. U.S. President Donald Trump suggested the conflict could last longer than initially expected, telling supporters that the United States has “unparalleled firepower, unlimited ammunition, and plenty of time.”
At the same time, Iran’s newly appointed supreme leader Mojtaba Khamenei vowed to continue fighting, signaling that a quick diplomatic resolution remains unlikely.
The conflict has centered around the Strait of Hormuz, the narrow waterway responsible for transporting roughly one-fifth of the world’s oil and gas supply. Attacks on commercial vessels in the region and a de facto blockade have significantly slowed tanker traffic, tightening global supply.
Energy markets remain under pressure even after governments intervened. The International Energy Agency has agreed to release a record 400 million barrels from strategic reserves, while the United States temporarily eased certain sanctions on Russia to help stabilize supply.
Analysts warn that the longer shipping remains disrupted, the greater the economic risks. Barclays strategist Emmanuel Cau noted that investors initially expected a short conflict but are becoming increasingly uneasy as the crisis drags on.
Energy executives are also sounding the alarm. Amjad Bseisu, CEO of EnQuest, said the market may be witnessing one of the largest supply shocks in modern history. Roughly 20 million barrels of oil per day normally pass through the Strait of Hormuz, and any prolonged disruption could tighten supply dramatically.
Bseisu compared the situation to the 1973 oil crisis, when an Arab oil embargo triggered a quadrupling of oil prices.
For global markets, the message is clear: energy prices are now a key variable for inflation, growth, and central bank policy. If the Strait of Hormuz remains constrained, oil could climb much higher—raising the risk of stagflation across major economies.
