Tensions in the Middle East escalate, international oil prices break through $100 per barrel

Tensions in the Middle East at sea have escalated again, and international oil prices jumped accordingly. On the 22nd, Brent crude oil once again broke through the $100 per barrel level.

On that day, ICE Futures Exchange’s June-delivery Brent crude oil futures closed at $101.91 per barrel, up 3.5% from the previous close; on the New York Mercantile Exchange, June-delivery West Texas Intermediate (WTI) closed at $92.96 per barrel, up 3.7%. International oil prices surged sharply in the short term due to renewed intensification of military uncertainty around the key oil transportation corridor, the Strait of Hormuz. The Strait of Hormuz is the throat passage through which crude oil from Middle Eastern oil-producing countries flows to the global market; when the risk of conflict rises in the region, the market often quickly reflects the possibility of a supply disruption in prices.

The navy of Iran’s Islamic Revolutionary Guard Corps announced the seizure of two container ships entering Iranian territorial waters, the “MSC Francesca” and the “Deparmino Dadas.” Iran’s Mehr News Agency reported that the “Euphoria” was also seized while passing through the Strait of Hormuz. Iran said that these ships attempted to leave the strait without permission from the Iranian military. The UK Maritime Trade Operations (UKMTO) also released news the same day, saying that a vessel in the Strait of Hormuz was attacked by a fast-attack craft of the Revolutionary Guard. The reports of ship seizures and attacks followed one after another, leading the market to worry that this is not an isolated incident and could shake the entire maritime logistics system.

This action came at a time when U.S. President Donald Trump announced that the “two-week ceasefire” with Iran would be extended, with the original ceasefire set to expire one day later. However, the United States has continued to say it will maintain its maritime blockade and military readiness posture against Iran, which Iran strongly opposes. Against this backdrop, the seizure of ships is interpreted as a signal that Iran will continue to use its control over the Strait of Hormuz as a bargaining chip even during the negotiation phase. In other words, even if a military conflict does not escalate into a full-scale war, the fact that passage through the strait may be repeatedly obstructed is heightening market anxiety.

Pressure on both supply and demand has also helped drive oil prices higher. Data from the U.S. Energy Information Administration (EIA) show that for the week ending April 17, U.S. gasoline inventories were 228.4 million barrels, down 4.6 million barrels from the previous week. That decline far exceeded the market’s expected drop of 1.5 million barrels reported by Reuters. With the summer travel-demand growth period approaching, the inventory drawdown exceeding expectations led the market to believe that the supply buffer space is tighter than previously thought. Giovanni Staunovo, a commodities analyst at UBS, said that as long as navigation through the Strait of Hormuz remains restricted, concerns about supply contraction and the support for oil prices will persist, based on this logic. This trend suggests that if the Middle East situation cannot be calmed and maritime navigation remains uneasy, international oil prices staying at high levels may continue in the short term.