Global oil prices climbed sharply on Thursday, with Brent crude reaching a fresh four-year high as concerns grew that tensions between the United States and Iran could intensify, threatening prolonged disruptions to Middle Eastern oil supplies and global economic stability.
Brent crude futures rose $4.28, or 3.63%, to $122.31 per barrel, after hitting an intraday peak of $126.41 — the highest level since March 9, 2022. The front-month June contract, which has now gained for nine consecutive sessions, is set to expire Thursday. Meanwhile, the more actively traded July contract stood at $112.49, up $2.05, or 1.86%.
West Texas Intermediate futures also increased, gaining $1.46, or 1.37%, to $108.34 per barrel — the highest level since April 7 — extending a 7% surge from the previous session.
So far this year, Brent prices have more than doubled, while WTI has climbed roughly 90%. Both benchmarks are on course for a fourth consecutive month of gains, driven by fears that the Iran conflict could significantly restrict oil supplies, fuel inflation, and heighten the risk of a global economic slowdown.
Donald Trump is expected to receive a briefing on Thursday regarding potential military strikes on Iran, aimed at pushing Tehran back to negotiations over its nuclear programme, according to media reports.
The conflict escalated after the US and Israel launched air strikes on Iran on February 28, prompting Tehran to block most shipping through the Strait of Hormuz — a critical route for global energy supplies. Although a ceasefire has temporarily halted active combat, the US has maintained a blockade on Iranian ports.
Efforts to resolve the crisis have stalled, with Washington insisting on addressing Iran’s alleged nuclear weapons programme, while Tehran demands partial control over the strait and compensation for war-related damages.
Analysts warn that the situation is unlikely to improve soon. “Prospects for any near-term resolution to the Iran conflict or a reopening of the Strait of Hormuz remain dim,” said IG market analyst Tony Sycamore.
Market participants remain focused on the risk of a prolonged disruption in oil flows, overshadowing longer-term concerns such as the evolving role of OPEC+.
The group is expected to consider a modest increase of around 188,000 barrels per day in output quotas at an upcoming meeting. However, the recent decision by the United Arab Emirates to exit the alliance — effective May 1 — could weaken its ability to influence global oil prices.
Despite the potential for increased production, analysts believe supply constraints will persist, especially with the continued closure of key transit routes and war-related disruptions. As a result, some experts suggest that reduced demand — driven by high prices — may be the primary mechanism to rebalance the market.
Analysts at ING estimate that approximately 1.6 million barrels per day of oil demand could be lost as consumers cut back on usage due to elevated prices. However, they note that this reduction is still insufficient to offset the current supply shortfall.
