Global oil prices climbed sharply to their highest level since 2022 following reports that the US military may present new Iran-related action plans to Donald Trump.
Benchmark Brent crude briefly surged nearly 7% to over $126 per barrel before retreating later in the day. The spike comes as tensions in the Iran conflict intensify and negotiations appear to have stalled.
A key factor behind the surge is the continued disruption in the Strait of Hormuz, a crucial route through which roughly 20% of the world’s oil and liquefied natural gas flows. Ongoing threats and blockades in the area have raised concerns about global energy supply.
According to reports, the US Central Command has prepared options involving targeted strikes on Iran, as well as potential efforts to regain control of parts of the waterway to resume shipping. Iran, meanwhile, has signaled it will defend the route and respond to any escalation.
Oil price volatility was also influenced by technical factors, including the expiration of June futures contracts, which contributed to a later drop in prices. More active July contracts traded lower, around $110 per barrel.
Rising crude prices are already affecting consumers. In the UK, petrol and diesel costs have increased significantly compared to pre-conflict levels, putting pressure on households and businesses.
Experts warn the impact could extend beyond fuel. Higher energy costs are expected to drive up prices for food, flights and goods, as supply chains absorb the increased expenses. Fertiliser prices have also risen, adding further pressure on global food production.
Analysts say continued escalation could keep oil prices elevated into next year, increasing uncertainty for both markets and policymakers.
