US-Iran Conflict: Global crude oil prices surged to a six-week high on Thursday, with Brent crude crossing $95 per barrel as escalating tensions between the United States and Iran intensified concerns over oil supply routes. Market analysts say geopolitical risks are now driving prices higher, with further gains possible if disruptions worsen. (Reuters)

Global oil markets extended their rally on July 23, with crude prices rising sharply after renewed military escalation in the Middle East heightened fears over disruptions to key shipping routes. Brent crude briefly climbed above $96 per barrel, marking its highest level since early June, while US benchmark West Texas Intermediate (WTI) also posted strong gains. (Reuters)

The latest surge comes as concerns grow over the security of vital energy corridors, particularly the Strait of Hormuz and the Red Sea, both of which play a crucial role in global oil transportation.

Brent Crude Reaches Six-Week High

During Thursday's trading session:

• Brent crude rose about 2% to around $96 per barrel.
• WTI crude gained roughly 1.7% to trade near $88.30 per barrel.

The rally followed strong gains in the previous session, pushing benchmark oil prices to their highest levels in more than six weeks. (Reuters)

Geopolitical Tensions Fuel the Rally

Oil prices have been supported by escalating geopolitical developments in the Middle East.

According to reports, the United States carried out another round of military strikes on Iran, while Iran-backed Houthi forces continued targeting commercial shipping in the Red Sea. At the same time, Iranian authorities warned of restrictions around the Strait of Hormuz, raising concerns over one of the world's busiest oil transit routes. (Reuters)

These developments have increased fears that any disruption to tanker movement could tighten global crude supplies and push prices even higher.

Supply Risks Dominate Market Sentiment

Energy analysts say the current rally is being driven more by risk premium than by actual supply shortages.

Even though large-scale physical disruptions have not yet occurred, traders are factoring in the possibility of interruptions across multiple strategic shipping routes, including:

• Strait of Hormuz
• Red Sea
• Bab el-Mandeb Strait

With several geopolitical flashpoints active simultaneously, markets remain highly sensitive to new developments. (Reuters)

US Crude Inventories Offer Mixed Signals

While geopolitical tensions are supporting prices, inventory data from the United States has presented a contrasting picture.

Recent figures showed that US crude oil inventories increased by around 2 million barrels, surprising analysts who had expected a decline. The build in stockpiles was attributed to:

• Lower refinery activity
• Reduced crude exports
• Higher imports

Ordinarily, rising inventories would weigh on oil prices, but current geopolitical concerns have overshadowed those fundamentals. (Reuters)

Experts Expect Near-Term Volatility

Market experts believe crude oil is likely to remain volatile in the near term.

According to commodity market analysts, the widening price difference between immediate and future delivery contracts indicates growing concern over short-term supply availability rather than long-term demand.

Some analysts suggest that if tensions around the Strait of Hormuz or Red Sea intensify further, Brent crude could move towards the $100-per-barrel mark in the coming sessions. (Reuters)

Others note that WTI crude continues to trade with a positive bias above key technical support levels, although future price direction will largely depend on geopolitical developments rather than traditional supply-and-demand fundamentals. (Reuters)

What Higher Oil Prices Could Mean

A sustained rise in crude oil prices could have broader economic implications, particularly for oil-importing countries such as India.

Higher crude prices may eventually affect:

• Fuel prices
• Transportation costs
• Inflation
• Manufacturing expenses
• Household budgets

While retail fuel prices in India have remained relatively stable in recent months, prolonged strength in global crude prices could increase pressure on domestic energy markets if geopolitical tensions persist.

For now, traders and policymakers alike remain focused on developments in the Middle East, as any further escalation could significantly influence the direction of global oil prices in the days ahead.