Oil Prices Surge as Strait of Hormuz Blockade Deepens Energy Crisis

Brent and WTI crude futures rose on Friday, driven by escalating tensions in the Middle East and the continued closure of the Strait of Hormuz. Brent crude increased by more than 1.25% to reach $105.38 per barrel, while West Texas Intermediate (WTI) gained 1.14% to trade at $96.96. The price action comes amid a complex geopolitical landscape. While President Donald Trump announced a three-week extension of the ceasefire between Israel and Lebanon following White House negotiations, the situation between the U.S. and Iran has deteriorated into a naval standoff. Both nations have reportedly seized ships as part of a strategic effort to gain economic leverage. The closure of the Strait of Hormuz, a critical chokepoint for global energy, has created a severe supply vacuum. According to the International Energy Agency (IEA), the world has lost approximately 13 million barrels per day of oil. Historically, the strait handled roughly 20 million barrels of oil and petroleum products daily. Fatih Birol, head of the IEA, described the current situation as the most significant energy security threat in history. Analysts from the Commonwealth Bank of Australia suggest that while the U.S. may eventually concede due to mounting economic pressures, the risk of further military escalation remains high, which could potentially drive the U.S. dollar higher.