Iran Attack Sparks Oil Market Volatility Amid Supply Concerns

Global oil markets reacted sharply to a reported military strike targeting Iranian infrastructure near the Strait of Hormuz, a key maritime chokepoint for crude shipments. Within hours of the incident, Brent crude futures climbed 7.3% to $105.80 per barrel, while U.S. West Texas Intermediate (WTI) rose to $101.40, reflecting heightened supply risk perceptions. The attack, which damaged a facility used to store and transfer crude, raised concerns about the stability of energy transit routes in the region. Analysts estimate that up to 18 million barrels per day of global oil production and trade pass through the Strait of Hormuz, with Iran accounting for approximately 2.6 million barrels per day in exports. Any sustained disruption could accelerate price increases beyond current levels. Oil traders are now factoring in a higher probability of supply shortages, particularly in Asia, where demand remains robust. Refineries in India and China have already adjusted procurement plans, leading to increased spot market activity. Meanwhile, major energy firms including TotalEnergies, Chevron, and Saudi Aramco have initiated risk assessments of their regional operations. The geopolitical tension has also prompted central banks and financial institutions to reassess inflation forecasts. The European Central Bank and the U.S. Federal Reserve are monitoring oil price movements closely, as a sustained increase above $110 per barrel could pressure consumer prices and delay interest rate cut cycles.