Oil prices climb near two-week high on Hormuz closure, Houthi attacks
Brent crude approaches $85 per barrel as shipping disruptions in the Strait of Hormuz and Red Sea strikes by Houthi militants tighten supply risks.
Global oil prices rose to near two-week highs on Monday as the closure of the Strait of Hormuz and ongoing Houthi strikes in the Red Sea heightened supply concerns.
Brent crude futures, the international benchmark, traded at $84.60 per barrel in early European trade, up 1.2% on the day and approaching levels last seen two weeks ago. The upward momentum reflects persistent geopolitical risks that have disrupted key shipping lanes in the Middle East.
The Strait of Hormuz, a critical chokepoint for global oil transit, remains effectively closed following regional tensions, while Houthi militants in Yemen have continued to target commercial vessels in the Red Sea. The attacks have forced several shipping companies to reroute cargo around southern Africa, adding to delays and costs in global trade.
Analysts at Goldman Sachs noted that the disruptions could tighten global oil supply by up to 1 million barrels per day if the situation persists. "The combination of Hormuz closure and Red Sea strikes is creating a tangible supply risk," the bank said in a client note. The U.S. Energy Information Administration (EIA) has also warned of potential short-term price volatility due to the uncertainty.
The geopolitical premium in oil markets has been further exacerbated by reports of reduced exports from Iraq, a major OPEC producer, amid ongoing internal political instability. While OPEC+ has not yet signaled an emergency meeting, market watchers suggest that any prolonged disruption could prompt coordinated action to stabilize prices.
For now, traders are pricing in a risk premium of $5-$7 per barrel, according to market estimates. The situation remains fluid, with no immediate signs of de-escalation in either the Strait of Hormuz or the Red Sea.
The latest price surge follows a week of volatility driven by conflicting signals from OPEC+ regarding production cuts and demand outlooks. However, the current geopolitical risks have overshadowed those fundamentals, pushing prices higher.
Sophie covers currency markets and central bank policy across Europe, with a focus on how rate decisions ripple through FX pairs. She has been tracking the ECB's policy path since the start of the current easing cycle.
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