Brent crude has climbed above $90 a barrel, driven by intensifying fears of a dual blockade around the Arabian Peninsula.
The sharp repricing marks a significant reversal from the previous week, when advancing US-Iran peace talks had seen the benchmark slide below $71 as traders unwound geopolitical risk premiums. The current surge reflects growing market anxiety over potential supply disruptions as hostilities escalate in the region, with the Strait of Hormuz once again at the center of shipping concerns.
Just days ago, Citigroup analysts projected Brent crude could fall to $60 as geopolitical pressures eased.
The renewed pressure on energy markets comes as commodity analysts point to the escalating risk in the key shipping chokepoint as the primary driver of the rally.
Unlike the recent period of easing tensions, where Hormuz traffic recovery and resumed Iranian exports helped stabilize prices, current reports suggest a deterioration in the security environment.
This shift has forced traders to reassess the likelihood of sustained supply interruptions, leading to a rapid accumulation of long positions in crude futures.
This development stands in stark contrast to earlier forecasts that saw the risk premium unwinding.
Just days ago, Citigroup analysts projected Brent crude could fall to $60 as geopolitical pressures eased. The current move invalidates that bearish thesis, highlighting the fragility of the recent calm.