Global oil prices spiked sharply after US President Donald Trump announced a blockade of the Strait of Hormuz, following the collapse of high-level talks between the United States and Iran.
The blockade targets Iranian-linked shipping and vessels paying transit fees to Iran, aiming to restrict the country’s oil exports through one of the world’s most critical energy routes. The move came shortly after marathon negotiations in Islamabad ended without agreement.
Markets reacted immediately, with Brent crude rising 7.7 percent to $102.52 per barrel, while US crude climbed nearly 8 percent to $104.02. Gas prices also surged, reflecting growing concerns over supply disruptions.
The escalation reversed recent declines in energy prices that followed a brief ceasefire between Washington and Tehran. Analysts, including those at JPMorgan Chase, expect oil prices to remain elevated in the near term before potentially stabilising later in the year.
Global stock markets showed mixed reactions. Major Asian indices declined, including Japan’s Nikkei 225 and Hong Kong’s Hang Seng Index, while European markets also fell, particularly in the airline sector. Meanwhile, energy giants such as BP and Shell saw gains as rising oil prices boosted their outlook.
Market experts warned that continued instability in the region could fuel inflation globally, as disruptions in oil supply chains add pressure to already volatile markets.
