Oil prices have skyrocketed: How is the conflict between the U.S. and Iran affecting the global energy market?

Global oil prices continue to rise sharply amid the military standoff between the U.S. and Iran, with Brent and WTI prices hitting multi-month highs. The threat of a blockade of key shipping routes in the Persian Gulf and the Red Sea is posing new challenges for the global economy, the fuel market, and stock exchanges. Learn more about the reasons behind the rise in oil prices, the shipping situation in the Strait of Hormuz, and the reaction of global markets

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The escalation of tensions between the U.S. and Iran has triggered a new surge in oil prices on the global market. The benchmark Brent and WTI grades continue to hit new highs, while maritime shipping in the Persian Gulf and the Red Sea has been threatened. The New York Times recently reported on this.

Below is a detailed analysis of the current situation: what events have influenced the market, how much fuel prices have risen, what to expect from the stock markets, and what role key shipping routes play in the rise in energy prices.

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What caused the rise in oil prices: the escalation between the U.S. and Iran

U.S. Secretary of State Marco Rubio stated on Wednesday that American troops will continue to strike Iran as long as Tehran attempts to control shipping in the region. A day earlier, President Donald Trump and Defense Secretary Pete Hagseth announced their readiness to intensify the military campaign and consider strikes against the Houthis.

Trump also posted a direct threat against Tehran on his social media account: if Iranian forces attack ships in the Strait of Hormuz, the U.S. will strike one of the bridges or energy facilities, particularly those near the capital. Such statements are heightening market uncertainty and directly affecting stock prices.

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Current Brent and WTI Oil Prices

Oil prices are rising for the third day in a row. The benchmark Brent crude rose 3.3% to $94.07 per barrel. Over the past week, it has gained about $10 amid military developments in the Middle East. Overall, since the start of the war, the price of crude oil has risen by 30%.

The U.S. benchmark West Texas Intermediate (WTI) is also on the rise. Its price climbed 2.3% to $86.83 per barrel. Analysts note that future trends will depend on a number of geopolitical and economic factors.

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Risks to Shipping: The Strait of Hormuz and the Red Sea

The situation surrounding key maritime trade corridors remains tense. According to Kpler, only nine vessels passed through the Strait of Hormuz—a narrow strait between Iran and Oman—on Tuesday. This is a critically low figure for a region that traditionally accounts for a significant portion of global oil supplies.

Analysts are focusing on several factors that will determine the future trajectory of oil prices:

• the volume of shipping through the Strait of Hormuz;

• whether the Houthis will carry out their threats to restrict traffic in the Bab el-Mandeb Strait in the southern Red Sea;
• the volume of China’s oil purchases;
• the extent of damage to oil refineries in the region;
• the level of global crude oil and fuel reserves amid the hostilities.

The Iran-backed Houthis have announced a blockade of ships departing from Saudi ports. As a result, oil tankers heading toward Bab el-Mandeb have begun turning around and heading north toward the Suez Canal. The world’s two largest shipping companies—France’s CMA CGM and Denmark’s Maersk—have already announced emergency fuel surcharges, which further affect the final cost of shipping.

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How are fuel prices rising for end consumers?

Fuel prices continue to rise. On Wednesday, the average price of gasoline in the U.S. rose another 4 cents to reach $4.06 per gallon, according to data from the AAA auto club. Since the start of the war, the national average price at gas stations has risen by 36%.

Diesel prices are also hitting new highs. The average price of diesel has risen to $5.18 per gallon, which is approximately 38% higher than before the conflict began. Fuel markets are under particular pressure due to the shutdown of a number of oil refineries, particularly in the Persian Gulf and Russia.

It is worth noting that fuel prices do not move in sync with crude oil prices but with a lag of several days. This means that further increases in fuel prices for consumers are likely even if crude oil prices stabilize.

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Stock Market and Currency Reactions

Global stock markets are showing mixed trends. On Wednesday, the U.S. S&P 500 index fluctuated between modest gains and losses and closed down 0.1%. Investors are awaiting quarterly reports from Alphabet and Tesla—companies capable of significantly influencing the index’s future movement.

The European Stoxx 600, which tracks the region’s largest companies, gained about 0.6% at the close of trading. Asian stock markets remained relatively stable, but the currencies of countries that are heavy importers of oil and gas came under pressure.

The Japanese yen drew particular attention: on Wednesday, it traded at around 163 per dollar. This is the weakest level in roughly four decades, indicating the significant impact of oil prices on Asian economies.

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