Oil prices skyrocketed Thursday, with Brent crude surging over 7% to touch $126 a barrel-the highest intraday level since 2022. The US benchmark WTI also jumped more than 3%, hitting over $110 per barrel.
Prices have since eased slightly to around $122 (Brent) and $108.5 (WTI), but remain at levels not seen since the start of the Iran war.
The spike is directly tied to stalled talks on reopening the vital Strait of Hormuz and a growing risk of renewed US-Israeli military action. President Trump is set to meet with US Central Command chief Admiral Brad Cooper to review new military options for Iran-a move that signals potential escalation.
A fragile ceasefire has held since early April, but negotiation efforts have collapsed. Both the US and Iran maintain their blockade of the Strait of Hormuz. Adding to the tension, Central Command has reportedly requested deployment of hypersonic missiles to the region for the first time.
Meanwhile, the UAE officially exited OPEC earlier this week, a move that would normally rattle markets. But the war premium has dominated, with investors focused on absent Iranian crude, suspended shipping routes, and threats to regional infrastructure over cartel politics.