28/04/2026 06:25 AST
Global oil prices climbed again at the start of the week as renewed geopolitical tensions around the Strait of Hormuz revived supply concerns, pushing crude benchmarks back toward the psychologically significant $100-a-barrel mark and reinforcing expectations of continued volatility through 2026.
Brent futures rose $2.16, or 2.1 per cent, to $107.49 a barrel at 10:01 a.m. EDT (1401 GMT), while US West Texas Intermediate (WTI) crude rose $1.32, or 1.4 per cent, to $95.72, according to Reuters data at 7pm on Monday. The rebound followed a sharp correction earlier this month when easing tensions briefly pulled prices into the low-$80 range.
The latest rally underscores how quickly sentiment in global energy markets can shift when risks emerge around the Strait of Hormuz - the strategic corridor through which roughly one-fifth of the world's oil shipments move. Any tightening of traffic through the waterway immediately amplifies supply concerns, particularly for Asian importers heavily dependent on Gulf crude.
Analysts say the renewed upward momentum reflects the market's growing sensitivity to geopolitical signals rather than underlying demand fundamentals.
According to Goldman Sachs, risks to the oil market remain skewed to the upside despite expectations of moderating prices later this year. The bank recently lifted its outlook, projecting Brent crude to average about $90 per barrel in the fourth quarter and WTI around $83.
However, the bank warned that the broader economic shock triggered by regional instability could extend beyond crude supply alone.
"The economic risks are larger than our crude base case alone suggests," analysts said, citing elevated refined-product prices, shortages risks and the scale of disruption already affecting global trade flows.
Indeed, the price surge itself is beginning to weigh on consumption. Goldman Sachs estimates global oil demand could fall by roughly 1.7 million barrels per day in the current quarter, with a further decline of about 100,000 barrels per day expected in 2026 compared with 2025 levels - a sign that demand destruction is already underway.
Markets remain especially sensitive to developments involving Iran and the United States, with negotiations still on hold and uncertainty surrounding a possible restart. While comments from Donald Trump suggested openness to renewed talks, the absence of concrete progress has kept traders cautious.
Iran has floated a phased negotiation framework beginning with ceasefire arrangements and eventually addressing Hormuz management and nuclear issues. For now, however, shipping risks and insurance costs continue to shape price expectations more than diplomatic signals.
The volatility seen in recent weeks highlights how fragile the balance between supply fears and demand erosion has become. Earlier this month, WTI briefly surged toward $117 before retreating sharply toward $80 as optimism over de-escalation resurfaced. The latest rebound toward $100 again reflects the market's headline-driven behaviour rather than structural tightening in physical supply.
Investors are also watching macroeconomic signals closely for clues about the trajectory of energy demand. Upcoming US Federal Reserve guidance, inflation indicators and first-quarter GDP data are expected to influence expectations for interest rates and growth - both critical drivers of oil consumption.
Despite the recent rally, analysts caution that elevated prices may prove difficult to sustain if weaker economic activity begins to offset supply concerns. Higher borrowing costs, slower industrial output and reduced transport demand could gradually cap upside momentum later this year.
For now, however, geopolitical uncertainty remains the dominant force in oil markets. As long as risks around the Strait of Hormuz persist and diplomatic progress remains uncertain, crude prices are likely to remain highly reactive - with sharp swings continuing to define the outlook for global energy markets through the months ahead.
Khaleej Times
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