Crude Oil Prices Spike Over Uncertainty On Opening Of Strait Of Hormuz

After around a 15% drop on Wednesday, oil prices spiked early on 9 April as Iran closed the Strait of Hormuz.

As of 10 AM, Brent crude oil was priced at $97.02 per barrel, up 2.41%. And West Texas Intermediate (WTI) crude was trading at $97.46 per barrel, up 3.05%.

After a temporary ceasefire deal, Iran closed the Strait of Hormuz after it alleged the US and Israel had violated the ceasefire. The Strait of Hormuz is a key shipping route which controls one-fifth of the world’s oil supply.

Why Is The Price Of Crude Oil Rising?

Brent crude saw a rise in price after Israel continued bombing in Lebanon, which it says is not part of the ceasefire talks.

Oil prices are most sensitive to geopolitical actions, especially in West Asia, where the ongoing conflict has already led to supply disruptions and concerns over potential spillover into major oil-producing nations like Iran.

In a post on X, Iranian President Masoud Pezeshkian said that Iran announced the general outline of its 10-article plan as the framework for halting the war and one of the main conditions is a ceasefire in Lebanon.

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What Is The Outlook For Crude Oil?

Crude oil prices can stay volatile in the coming period. Geopolitical tensions are driving most of this move. Supply issues from the Middle East are also not easing. That keeps the market on edge.

Prices are expected to stay elevated at least through the end of 2026, though they are anticipated to decline significantly to around $76 per barrel by 2027.

Sources:

Mint

CNBC

Energy Information Administration