Oil prices rise 4 percent in global market amid Hormuz tensions

Fresh volatility has hit the global energy market as tensions and uncertainty surrounding the Strait of Hormuz continue to escalate in the Middle East. The impact has already been reflected in international crude oil prices. At the start of trading on Monday, May 11, the prices of Brent crude and US WTI crude rose by more than 4 percent. Concerns over possible supply disruptions and growing geopolitical tensions have increased anxiety among investors, driving the upward trend in the oil market.

In the international market, Brent crude prices climbed 4.11 percent to $105.45 per barrel. Meanwhile, West Texas Intermediate crude rose 4.59 percent to $99.80 per barrel. Fresh fears over supply shortages emerged after US President Donald Trump described Iran’s response to a US proposal as “unacceptable”. At the same time, pressure on the global energy market remains high as oil shipments through the Strait of Hormuz have yet to return to normal.

Analysts say the oil market has now become heavily dependent on geopolitical developments. Major fluctuations are being driven by every statement coming out of Washington and Tehran.

Meanwhile, there is growing market interest surrounding Trump’s upcoming visit to Beijing. Analysts believe he may discuss the Iran and Hormuz situation with Chinese President Xi Jinping. There is also speculation that China could use its diplomatic influence to pressure Iran towards a ceasefire and the restoration of normal shipping operations through the Strait of Hormuz.

Saudi Aramco chief executive Amin Nasser said the global market has lost nearly one billion barrels of oil over the past two months. As a result, he warned that stabilising supply would take time even if exports fully resume.

According to shipping data, some oil tankers are crossing the Strait of Hormuz with their tracking systems switched off in an attempt to avoid potential attacks. This has further increased risks surrounding Middle Eastern oil exports.

Analysts believe volatility in global oil prices may continue until tensions around Hormuz ease completely.