Oil prices surged over 6% on April 20, with Brent nearing $96/bbl and WTI rising above $89, as tensions between the U.S. and Iran raised concerns about a potential ceasefire breakdown.
The key risk centers on the Strait of Hormuz, a critical route for roughly 20% of global oil supply. Recent actions, including the U.S. seizure of an Iranian vessel and Iran’s withdrawal from further talks, have heightened fears of disruption.
Although tanker traffic has continued, markets are pricing in geopolitical risk rather than actual supply losses. Additional pressure comes from Ukrainian strikes on Russian oil infrastructure.
Outlook: Oil markets are being driven by uncertainty. Any escalation could push prices higher, while diplomatic progress may quickly reverse gains.
Author: phinds
