Global crude prices climbed on Friday as geopolitical tensions around Iran and uncertainty over US–Iran talks kept markets on edge, with Brent Crude rising above $106 per barrel.
Brent futures gained $1.23 (1.17%) to $106.3 a barrel in early trade, while West Texas Intermediate (WTI) rose $1.07 (1.12%) to $96.92, according to Reuters. Both benchmarks had already surged over 3% in the previous session, reflecting a growing geopolitical risk premium.
Escalation fears unsettle markets
Investor sentiment weakened after reports of heightened military activity in Tehran, including Iranian air defences engaging “hostile targets.” These developments, coupled with signs of internal power tensions, have added to market anxiety.
Donald Trump said Iran may have strengthened its military capabilities during the ceasefire period, though he asserted that US forces could neutralise them quickly.
Hormuz remains the flashpoint
Tensions escalated further after Iran released footage showing commandos boarding a cargo vessel in the Strait of Hormuz — a critical route that handles nearly 20% of global oil and gas shipments.
Analysts warn that any prolonged disruption in this corridor could significantly tighten global supply.
Mingyu Gao of China Futures noted that inventories could drop below five-year seasonal averages by late May or early June if tensions continue, adding further upward pressure on prices. Haitong Futures described the current ceasefire as a potential “preparatory phase for war,” warning of escalation risks if talks stall.
Diplomacy in limbo
Trump signalled no urgency in sealing a deal, saying he would not rush negotiations. Meanwhile, Israel and Lebanon agreed to extend their ceasefire after talks in Washington, even as Israel maintained it was ready to resume operations against Iran if needed.
Volatility likely to persist
With military posturing, fragile diplomacy and maritime security concerns converging, oil markets remain highly sensitive to developments in the region.
Any escalation around Hormuz or breakdown in negotiations could push prices higher, keeping volatility elevated in the near term.
