LONDON, July 9 — The shift is subtle but significant. Oil markets are recalibrating risk, and the price signal is clear. Brent crude surged 3% to $84 per barrel on May 13, 2025, after Iran seized a commercial vessel in the Strait of Hormuz.
That single event, a flashpoint in a volatile region, sent a jolt through the global energy system. The numbers tell the story.
Brent crude, the global benchmark, settled at $84.50 per barrel that day. West Texas Intermediate, the US benchmark, reached $80.20. The market’s reaction was immediate: a 3% jump, reflecting what traders assessed as a real supply disruption risk.
The Strait of Hormuz is a narrow chokepoint.
The OPEC+ Factor
This is where the structural dynamics come into play. The Organization of the Petroleum Exporting Countries and its allies, including Russia — collectively known as OPEC+ — control about 40% of global oil production. That is a massive share.
In 2024, the group had already implemented production cuts of 2 million barrels per day. Those cuts were designed to support prices.
They worked. The market was already tight before the Strait of Hormuz incident. The trend underneath is one of deliberate supply management.
OPEC+ has shown a willingness to hold back output to keep prices elevated. The May 2025 disruption added a geopolitical premium on top of that.
Analysts are now watching for the next move from the group.
The US Position
The United States is the world’s largest oil producer. In 2024, it pumped about 13 million barrels per day. That is a staggering volume.
But here is the nuance: the US still relies on imports for certain grades of crude. It is not self-sufficient in every barrel.
The Energy Information Administration reported that US gasoline prices averaged $3.50 per gallon in May 2025. That is up from $3.20 a year earlier. The increase is modest, but it is a real cost for consumers.
Yet the global oil market is interconnected. A disruption in the Strait of Hormuz affects prices globally.
There is no isolation.
Historical Context
This is not the first time oil markets have faced a spike tied to Iran. History provides a stark benchmark. In July 2008, during a period of heightened tensions with Iran, oil prices spiked to $147 per barrel.
That was the all-time high. More recently, in March 2022, after Russia’s full-scale invasion of Ukraine, prices hit $130 per barrel.
The May 2025 surge to $84 is modest by comparison. But the trend underneath is what matters. The 2025 surge is a fraction of those historical spikes.
But analysts warn that this could change quickly. A full closure of the Strait of Hormuz, they say, could push prices above $100 per barrel.
That is not a forecast. It is a scenario. And it is one that traders are now pricing into their models.
What to Watch
Watch this space. The Strait of Hormuz remains a flashpoint. Iran has demonstrated its willingness to use the waterway as a lever.
Diplomatic channels are active. But the risk of a broader confrontation is real.
The market is also watching OPEC+. The group’s next meeting will be scrutinised for any signal on production levels. Every word from the ministers will move prices.
The trend underneath is a market that is structurally tight, geopolitically exposed, and increasingly sensitive to supply shocks. The 3% jump in May was a warning.
The next one could be larger. For now, the price of oil is a story of risk, of leverage, and of a global system that depends on a narrow stretch of water. What’s changing is the market’s willingness to price that risk in real time.
Sources
- Geopolitical Tensions Drive Crude Oil Prices Higher: Market Analysis
- Eight Geopolitical Risks That Could Send Oil Prices Surging
