Global crude oil benchmarks have soared more than 25% over the past two weeks, fueled by a sharp escalation in Middle East hostilities following the collapse of a recent interim peace agreement between the United States and Iran. The dramatic price surge reflects growing fears of severe global energy supply disruptions, as military actions and proxy strikes threaten two of the world’s most critical maritime oil transit chokepoints—the Strait of Hormuz and the Bab el-Mandeb Strait.
The rapid rise in energy costs has sent shockwaves through global financial markets, rekindling inflationary anxieties and sparking a sharp sell-off in government bonds as traders brace for potential central bank rate hikes. Although oil prices paused briefly on Friday—with Brent crude pulling back to around $96 per barrel and U.S. West Texas Intermediate dipping to $89—both contracts remain on track for massive fortnightly gains. Analysts warn that with maritime transit through the Strait of Hormuz severely curtailed and strategic buffer inventories sitting at historical lows, global energy markets remain highly vulnerable to further price spikes until regional security conditions stabilize.