Iran War Sends Oil Prices Surging Past $100 as Hormuz Crisis Deepens

Global oil markets continued their dramatic climb on Friday, with Brent crude settling at $103.69 per barrel — a 3.2% daily gain — while West Texas Intermediate rose 3.7% to close at $99.31. The surge marks a staggering 43% jump for Brent and nearly 50% for WTI over just two weeks, driven by the escalating military conflict involving Iran and growing fears over long-term energy supply disruptions.

At the center of the crisis is the Strait of Hormuz, the narrow waterway through which approximately one-fifth of the world's oil supply passes daily. Threats from Iran's new Supreme Leader Mojtaba Khamenei to permanently block the strait have rattled energy markets globally, raising alarm about a potential inflation shock that could push central banks toward more aggressive monetary tightening.

Emergency responses from world governments have done little to calm markets. The International Energy Agency announced an unprecedented 400-million-barrel release from strategic reserves, and the U.S. Treasury moved to permit limited purchases of sanctioned Russian crude already at sea. Treasury Secretary Scott Bessent also confirmed that the U.S. Navy is preparing to escort commercial vessels through the strait to help restore normal shipping operations.

Despite the turbulence — Brent briefly touched nearly $120 before pulling back below $90 — analysts remain divided on whether elevated prices will persist. Options market data currently places a one-in-five probability that Brent will trade at or above $100 three months from now.

JPMorgan analysts warned that crude would need to reach $125 or higher to rival the scale of past major supply shocks, with $150 required to match the disruption seen during the Russian invasion of Ukraine. ANZ analysts cautioned that supply losses are becoming increasingly structural, keeping price volatility — and upside risk — firmly in play.