Oil markets surged on Thursday as the West Asia war intensified, with energy prices jumping to massive highs after US President Donald Trump signalled that he would continue mounting sustained military pressure against Iran, giving no clarity on reopening the Strait of Hormuz.
Brent crude rose USD 7.87 (7.78 per cent) to settle at USD 109.03 per barrel, while US West Texas Intermediate (WTI) climbed USD 11.42 ( 11.41 pc) to USD 111.54 — its largest single-day gain in absolute terms since 2020.
Despite the spike, both benchmarks remain below the near-USD 120 levels seen earlier in the conflict, reports Bloomberg.
The rally followed Trump’s indication that US strikes would intensify in the coming weeks, reinforcing concerns that supply disruption could persist. He provided no timeline for restoring flows through Hormuz, which typically carries about 20 pc of global oil and liquefied natural gas.
With the route effectively shut after Iranian retaliation to US-Israeli strikes launched on 28 February, market focus has shifted from immediate damage to the risk of prolonged disruption. Traders are increasingly pricing in delays even if infrastructure remains intact.
“The real question… is whether the restart of oil flows is now delayed further,” said Dennis Kissler of BOK Financial.
Market structure also highlighted tight supply. WTI traded at an unusual premium of nearly USD 3 above Brent – the highest in a year – while front-month WTI recorded its widest-ever premium over later-dated contracts, signalling acute short-term scarcity.
As per the fluctuating forecasts, Citi sees Brent averaging around USD 95 in a base case and USD 130 in a seemingly optimistic scenario later this year, while JPMorgan estimates prices could reach as high as USD 120-130 in the near term and exceed USD 150 should disruption continues into mid-May.
Dallas Federal Reserve President Lorie Logan said the economic impact could remain manageable if the conflict resolves quickly, but warned uncertainty remains elevated.
On the supply side, US producers have begun to respond, with oil rig counts edging higher, though companies remain cautious about expanding output without sustained price strength.
Diplomacy also remains ongoing, with UK convening a virtual meeting of around 40 countries to discuss reopening Hormuz, though the US is not expected to attend, while OPEC is preparing to consider potential output increases.
