Oil prices have climbed to their highest level since 2022 after reports that the United States military is preparing to brief President Donald Trump on new strategic options regarding the escalating conflict with Iran.
Brent crude surged by nearly 7%, briefly exceeding $126 per barrel before retreating later in the day. The spike reflects growing concerns over potential supply disruptions as tensions intensify in the region.
According to reports,
US Central Command has developed plans for a series of “short and powerful” strikes targeting Iran’s infrastructure in an effort to break the current diplomatic deadlock. Another option under consideration involves securing parts of the Strait of Hormuz to reopen it for commercial shipping—an operation that could require deploying ground forces.
The strategic waterway remains effectively closed amid ongoing hostilities. Roughly 20% of the world’s oil and liquefied natural gas passes through the strait, making it a critical artery for global energy markets. Its disruption has already sent energy prices sharply higher.
Although Brent crude reached $126.31 earlier in the day, prices later fell back to around $114, partly due to the expiry of June futures contracts. Analysts noted that the more actively traded July contracts were priced lower, at about $110 per barrel.
The surge in crude prices is already translating into higher fuel costs. Petrol and diesel prices have risen significantly in several markets, increasing pressure on consumers and businesses alike. Beyond fuel, the impact is spreading across sectors, with rising costs expected for food, fertilizers, and air travel.
Fertilizer shipments—particularly urea—have been disrupted, driving up costs for farmers and raising concerns about future food price inflation. Airlines have also begun adjusting fares and reducing flights in response to higher fuel expenses.
Meanwhile, Iran has signaled it will maintain control over the waterway and respond to what it describes as hostile actions. The United States, on the other hand, has indicated it may continue blockading Iranian ports as long as threats to commercial vessels persist.
Market analysts warn that if oil prices remain near or above $125 per barrel, the economic consequences could intensify, potentially fueling inflation globally and complicating policy decisions for governments already facing economic strain.
