Global oil prices jumped sharply on Thursday morning (Pakistan Standard Time), with crude النفط crossing $120 per barrel as geopolitical tensions in the Middle East continued to disrupt supply.
The surge comes amid a combination of factors, including the exit of the United Arab Emirates from OPEC and ongoing tensions involving Donald Trump’s stance on Iran-related shipping restrictions.
UAE Exit from OPEC Shakes Market Confidence
The United Arab Emirates recently announced its decision to leave OPEC and the broader OPEC+ alliance, ending decades of cooperation with the oil-producing group.
This move has created uncertainty in global markets, as the UAE is one of the largest oil producers in the cartel. Analysts say the exit weakens coordination among oil-producing countries and adds volatility to pricing trends.
While the UAE may increase production in the future, the immediate impact is limited due to ongoing logistical disruptions in the region.
Strait of Hormuz Disruption Drives Supply Concerns
The biggest factor pushing oil prices higher is the continued disruption in the Strait of Hormuz, a critical route for global energy supplies.
This narrow waterway handles nearly 20% of the world’s oil and liquefied natural gas shipments. Any disruption here has a direct and immediate impact on global energy markets.
Recent reports indicate that tanker traffic through the Strait has dropped significantly due to ongoing tensions between the United States and Iran.
US-Iran Tensions and Shipping Restrictions
Tensions have escalated after the United States maintained strict measures targeting Iranian exports and maritime activity.
Reports suggest that US forces have increased monitoring and interception of vessels linked to Iranian ports. These actions have effectively reduced oil supply in global markets, pushing prices upward.
The situation has worsened after diplomatic efforts failed to produce a ceasefire or agreement to reopen shipping routes.
Market Reaction and Rising Volatility
Brent crude, the global oil benchmark, climbed above $120 per barrel, briefly touching $122—its highest level since 2022.
Oil markets have remained highly volatile in recent weeks. Prices had briefly declined earlier in April amid hopes of a ceasefire, but quickly rebounded after negotiations stalled and supply risks increased.
Energy analysts note that current price movements are driven more by geopolitical risks than by traditional supply-demand fundamentals.
Outlook: Risk of Further Price Increases
Experts warn that if disruptions in the Strait of Hormuz continue, global oil supplies could tighten further, leading to even higher prices.
A prolonged crisis may also impact global economic growth, increase inflation, and raise fuel costs worldwide.
For now, markets remain highly sensitive to any developments in the Middle East, particularly regarding shipping access and diplomatic negotiations.
