Oil prices experienced a dramatic surge Thursday morning, with Brent crude climbing above $125 per barrel as concerns mount over the prolonged Iran conflict and its impact on global energy supplies.
June delivery Brent crude spiked 6.2% to reach $125.36, while July contracts increased 3.1% to $113.85. Meanwhile, U.S. benchmark crude gained 2.3% to $109.38 per barrel.
The dramatic price increase represents a significant jump from pre-conflict levels, when Brent crude was trading near $70 per barrel before hostilities began in late February.
Now in its ninth week, the Iran conflict continues without any clear resolution in sight. The ongoing U.S. blockade of Iranian ports and the closure of the Strait of Hormuz have contributed to supply concerns that are driving prices upward. Thursday’s reports of potential escalation by U.S. President Donald Trump further dampened hopes for a swift resolution.
“The breakdown of talks between the U.S. and Iran, along with President Trump reportedly rejecting Iran’s proposal for a reopening of the Strait of Hormuz, has the market losing hope for any quick resumption in oil flows,” ING Bank strategists Warren Patterson and Ewa Manthey wrote in a research note.
Global financial markets also felt the impact, with Asian stock exchanges declining following lackluster trading on Wall Street Wednesday.
Japan’s Nikkei 225 dropped 1.6% to close at 58,967.07, while South Korea’s Kospi fell 1.1% to 6,615.51.
Hong Kong’s Hang Seng declined 1.3% to 25,772.50, though China’s Shanghai Composite managed a slight 0.1% gain to 4,109.99. Despite global energy market volatility caused by the Iran conflict, official data showed China’s manufacturing activity slowed modestly in April but remained in growth territory for the second consecutive month.
Australia’s S&P/ASX 200 fell 0.3% to 8,665.50.
Taiwan’s Taiex slipped 0.1% while India’s Sensex dropped 1.2%.
