LONDON, United Kingdom — Global oil prices climbed sharply after renewed tensions between the United States and Iran stalled diplomatic efforts, raising fears over prolonged disruptions in energy supply through the critical Strait of Hormuz.
Brent crude, the global benchmark, rose by about 2pc to $109.33 per barrel, while US-traded crude gained a similar margin to $96.78, reflecting market anxiety over supply constraints.
The price surge follows a decision by US President Donald Trump to cancel plans to send a delegation to Pakistan for a second round of peace talks with Iranian officials, citing internal divisions within Tehran’s leadership.
The stalled negotiations come amid ongoing conflict involving Iran, which has effectively shut down the Strait of Hormuz—a key maritime corridor through which roughly a fifth of the world’s crude oil and liquefied natural gas supplies pass.
Iran’s Foreign Minister Seyed Abbas Araghchi said discussions were ongoing with neighbouring Oman on ensuring safe transit through the waterway, signalling efforts to stabilise regional flows.
“Our focus included ways to ensure safe transit that is to benefit all neighbours and the world,” Araghchi said in a social media post.
He is also expected to hold talks with Vladimir Putin in St Petersburg, according to Iranian state media, as Tehran seeks broader diplomatic support.
Supply Chain Concerns
Analysts warn that prolonged disruption in the Strait could have far-reaching economic consequences beyond fuel markets.
Sophie Huynh, a strategist at BNP Paribas, said oil shortages could affect a wide range of goods due to their reliance on petroleum-based inputs.
“We’re not consuming crude, we’re consuming products,” she told the BBC, warning that items from household goods to medicines could face cost pressures if supply constraints persist.
Economists say even a short-term closure of the Strait of Hormuz could ripple across global supply chains, driving up transport, manufacturing, and consumer costs.
Market Reaction
Despite rising oil prices, global stock markets showed mixed reactions. In Europe, London’s FTSE 100 dipped slightly at the open, while Germany’s DAX edged higher and France’s CAC remained largely flat.
Asian markets, however, posted gains, with Japan’s Nikkei 225 rising 1.38 P.c and South Korea’s Kospi advancing over 2 P.c, extending a broader recovery after initial declines at the onset of the conflict.
Analysts suggest investors are becoming more cautious in reacting to geopolitical headlines.
“Traders want concrete evidence rather than a fragile ceasefire,” said Goh Jing Rong, an economics lecturer at Singapore Management University.
Policy and Cost Pressures
In the United Kingdom, the government is set to hold an emergency COBRA meeting to assess the impact of rising oil prices on household energy costs and inflation.
The surge in crude prices has already translated into higher fuel prices, raising concerns over living costs if the conflict continues.
Experts say the trajectory of oil markets will depend heavily on whether diplomatic channels reopen and whether shipping through the Strait of Hormuz resumes safely.
