Oil Prices Spike as U.S.-Iran Tensions Escalate in Strait of Hormuz

Global oil markets experienced a sharp rally on Sunday as military tensions between the United States and Iran intensified. West Texas Intermediate (WTI) for May delivery climbed approximately 7% to $89.85 per barrel, while the Brent benchmark for June rose by nearly 7% to $96.57. The price surge follows a series of naval confrontations in the Strait of Hormuz and the Gulf of Oman. President Donald Trump confirmed that the U.S. Navy fired upon and seized an Iranian container ship attempting to bypass a U.S. naval blockade of Iranian ports. This action followed reports from the United Kingdom Maritime Operations Centre that Iranian Revolutionary Guard gunboats had attacked a tanker on Saturday, alongside an unknown projectile hitting another container ship. The military escalation coincides with the imminent expiration of a ceasefire agreement this week. While the U.S. had proposed peace negotiations in Islamabad on Monday, Iranian state news agency IRNA reported that Tehran would not attend, citing the ongoing naval blockade and other grievances. The volatility marks a sharp reversal from Friday's market sentiment, where prices had tumbled after Iran briefly suggested the Strait of Hormuz would be open to commercial traffic. However, the subsequent failure to lift the U.S. blockade and Iran's decision to close the strait have reintroduced significant geopolitical risk premiums into crude pricing.