Crude oil prices have surged sharply as tensions in West Asia intensify, with Brent crude now trading around $116.53 per barrel, its highest level since June 2022. According to reports from CNBC-TV18, the market remains focused on the Strait of Hormuz, through which nearly 20% of global oil flows, as the ongoing US–Iran standoff continues to raise fears of a prolonged supply shock. The escalation has been driven in part by geopolitical signalling from Washington and Tehran, with US President Donald Trump warning that the naval blockade of Iranian exports could last 'months,' reinforcing expectations that Washington is prepared to tolerate higher oil prices as part of its broader strategic objectives. Latest developments show Iran's offer to reopen the Strait of Hormuz only if the US lifts its naval blockade without nuclear preconditions, which has been swiftly rejected by Washington.
Speaking to CNBC-TV18, Dave Ernsberger, President of S&P Global Energy, warned that the market impact could deepen significantly if disruptions persist. As reported by CNBC-TV18, he said, "We estimate that around one billion barrels of oil have effectively been removed from the global market in the past 60 days," adding that if the Strait of Hormuz remains closed for another two months, 'prices could rise towards $200 per barrel.' The key uncertainty is whether the conflict ends quickly or continues indefinitely, with current incentives not appearing to favour a near-term resolution. The IEA's warning that the world has lost 13 million barrels per day represents a supply shock without modern precedent, with the current situation forming the most bearish oil supply picture since the 1970s oil crises.
According to CNBC-TV18, Carole Nakhle, CEO of Crystol Energy, said the current price action is being driven more by politics than physical shortages, noting that "What is happening in the Strait of Hormuz—the political aspect—is what is driving oil prices today." While alternative export routes are helping offset some disruption, escalating rhetoric on both sides is keeping markets on edge and sustaining the risk premium in crude. The US approach signals tolerance for higher prices in the short term, with Washington's position as the biggest oil-producing country making it easier to accept higher prices. Wednesday's session was a controlled holding pattern ahead of the most consequential after-hours earnings release of 2026, with the market's refusal to break meaningfully lower despite $116 oil and a hawkish Fed transition signalling residual institutional conviction in underlying economic data.
As reported by CNBC-TV18, Vandana Hari, Founder and CEO of Vanda Insights, described the market as caught between two extreme outcomes, with traders struggling to price risk. She noted that the situation has become a 'war of attrition' with both sides unwilling to back down, creating heightened sensitivity to headlines including concerns over shipping through the Strait of Hormuz. Despite the sharp rally, most brokerages still expect crude to average around $80–90 per barrel over the medium term, assuming disruptions ease. However, risks remain skewed heavily to the upside, with extreme scenarios—such as a prolonged blockade of the Strait of Hormuz—seen capable of pushing prices towards $140–150 or even higher. The Pershing Square IPO and Kevin Warsh's Senate Banking Committee advancement point to a global monetary policy establishment increasingly constrained by energy geopolitics, with the Mag-7 earnings after-bell results expected to resolve the AI capex debate that will set the framework for the rest of Q2 earnings season.
