Global oil prices continued their climb today, extending a rally this week as geopolitical tensions in the Middle East fuel supply concerns amid active disruptions of shipping routes and energy infrastructure. In the Strait of Hormuz, persistent issues, including tanker attacks and stalled maritime movements, have effectively reduced oil flows and sparked fears of prolonged shortages. In this regard, Iraq has already cut its output by approximately 1.5 million barrels per day due to severe storage and export constraints. As a result, traders are actively pricing in the risk of broader forced shutdowns if the disruptions continue, which could have severe knock-on effects for overall crude exports from the region.
At the same time, the upside potential could remain capped to a certain extent. US initiatives to support tanker insurance and deploy naval escorts could help prevent more price spikes. Nevertheless, the prevailing uncertainty surrounding the conflict’s duration continues to keep upward pressure firmly in place. Moving forward, prices are expected to remain elevated as long as the risks surrounding the Strait of Hormuz persist. Any meaningful market pullbacks will likely depend on clear signs of geopolitical de-escalation or the sustained reopening of commercial tanker flows.