Global oil prices climbed sharply on Wednesday, with Brent crude briefly surging to $125.60 per barrel before easing to around $116.50 in early Thursday trading, according to data from Oilprice.com. The slight pullback represents a 1.47 per cent decline from its peak.
The US benchmark, West Texas Intermediate, also recorded gains, trading at $106.72 per barrel, though it dipped marginally by 0.15 per cent in early sessions.
The rally marks one of the most significant price increases since the onset of the Russia-Ukraine war, highlighting renewed volatility in global energy markets.
Reports by the BBC indicate that the surge was driven by escalating geopolitical tensions, particularly after news that the US military is preparing to brief President Donald Trump on possible strategic actions related to the Iran conflict.
Further developments suggest that Washington has rejected Tehran’s proposal to reopen the Strait of Hormuz, signalling that a naval blockade may remain in place pending broader negotiations on nuclear issues.
In a separate development, the United Arab Emirates announced its decision to exit the Organisation of the Petroleum Exporting Countries after nearly six decades of membership. The country is also set to withdraw from OPEC+, the broader alliance of oil-producing nations.
UAE Minister of Energy, Suhail Mohamed AlMazrouei, said the move aligns with evolving national energy policies and strategic priorities.
The combination of geopolitical uncertainty and structural shifts within major oil-producing blocs continues to drive market volatility, with analysts warning that prices may remain elevated in the near term.
In March, it was reported that Global crude oil prices surged past the $100 per barrel mark as tensions in the Middle East continued to disrupt energy supplies.
The spike in prices follows the continued shutdown of maritime traffic through the Strait of Hormuz due to the ongoing Middle East conflict, raising fears of the most severe energy disruption since the 1970s and posing risks to the global economy.
Market watchers have also speculated that the international oil benchmark could climb as high as $120 per barrel if the situation persists.
The Strait of Hormuz — a narrow channel linking the Persian Gulf with the Gulf of Oman and the Arabian Sea — is regarded as the only sea route through which Gulf oil and gas producers ship their energy supplies to global markets, making it one of the world’s most critical energy corridors.
According to a report by The Wall Street Journal, the disruption has already begun to drive up the cost of petrol and diesel while pushing mortgage rates and government borrowing costs higher in the United States.
“One week into President Trump’s war on Iran, the most severe shock to energy markets since the 1970s is cascading through the world economy,” the report reads.
“The disruption quickly fed into higher gasoline and diesel prices at the pump, and higher mortgage rates and borrowing costs for the U.S. government, endangering Trump’s economic priorities.
“To be sure, the U.S. has more shock absorbers this time around. Oil is a far smaller component of gross domestic product than it once was, and the U.S. has become a top energy exporter in its own right.”
