The oil market entered the new week under intense pressure as investors were forced to simultaneously price in two major factors: the risk of further escalation surrounding Iran and the possibility of a meaningful agreement that could reopen the Strait of Hormuz.

Against that backdrop, oil prices continued to rise sharply. June Brent crude climbed to around $111.08 per barrel, while May U.S. WTI crude moved above $114.72 per barrel. This price action suggests that the market is still maintaining a very high geopolitical risk premium.

The Strait of Hormuz Remains at the Center of the Crisis

The market’s main focal point at the moment is the Strait of Hormuz, the strategic energy corridor linking the Persian Gulf to the Gulf of Oman. It is one of the most critical arteries in global oil trade. Any disruption to traffic through this area immediately creates a supply shock and triggers a strong market reaction.

Since the war broke out on February 28, crude oil, jet fuel, diesel, and gasoline prices have all surged. The reason goes beyond the risk of physical shortages. It also reflects growing concerns over shipping costs, marine insurance, delivery timelines, and the possibility that supply recovery may take longer than expected.

Although shipping activity through Hormuz has shown some modest improvement, the recovery remains limited. According to the cited data, eight oil tankers passed through the strait on Monday, up from an average of fewer than two voyages per day in March. Even so, that figure remains far below pre-war levels, when an average of around 20 million barrels of crude oil and petroleum products passed through the strait each day in 2025.

Risk

What matters here is that the current shock is no longer just a story of oil prices rising because of war. When Middle Eastern supply is disrupted, energy-importing economies, especially in Asia, are forced to compete more aggressively for alternative sources.

That dynamic can push up logistics costs, squeeze refining margins, and spread price pressures into other parts of the economy. In other words, the market is now pricing in not only the risk of energy shortages, but also a reassessment of inflation, interest rates, and global growth prospects.

In this environment, if energy prices remain elevated, major central banks will face a difficult policy trade-off: either keep monetary conditions tight in order to contain inflation, or accept the risk of a deeper growth slowdown.

Supply Restoration Will Not Happen Overnight

Even in a scenario where negotiations begin to improve, a full restoration of energy flows through Hormuz is unlikely to happen immediately. According to the assessments cited in the analysis, the process of stabilizing supply and ensuring that energy reaches Asian economies facing growing shortages could take at least three to six months.

That means the oil market may have to live with elevated volatility in the near term. As long as geopolitical risk remains unresolved, oil prices still have a basis for staying high and reacting sharply to every new development from the negotiating table.

What Should Investors Watch at This Stage?

In the short term, oil prices will continue to depend on three key variables.

The first is whether a sufficiently credible agreement can be reached to reopen Hormuz in a meaningful way, rather than merely as a political statement.
The second is the actual pace of recovery in shipping flows through the strait.
The third is the knock-on effect on global inflation, interest-rate policy, and growth expectations.

If Hormuz is clearly reopened and market confidence begins to recover, oil prices could see a sharp pullback as the geopolitical risk premium fades. On the other hand, if negotiations remain deadlocked or the conflict escalates further, the market will likely continue pricing in a longer period of supply disruption.

The current rise in oil prices is not merely an emotional reaction to headlines about war. The market is reflecting a much broader picture: geopolitical risk has not eased, supply through one of the world’s most critical energy corridors remains disrupted, and higher energy prices could spill over into inflation and global growth.

In that context, oil is likely to remain highly sensitive and volatile as new developments emerge. For investors, this is a period that requires attention not only to oil prices themselves, but also to the progress of negotiations, the actual pace of shipping recovery through Hormuz, and the response of major central banks.

Because those are the factors that will ultimately determine whether the current surge is only a short-term shock, or the beginning of a new cycle of pressure on the global economy.