Brent Crude Rises Above $105 as Hormuz Closure Extends Oil Rally

Oil prices extended gains as Middle East tensions persisted and the closure of the Strait of Hormuz stoked concerns over supply disruptions.

CNBC reported on April 24 that Brent crude rose 1.25% from the previous session to $105.38 a barrel. West Texas Intermediate climbed 1.14% to $96.96.

Oil continued to advance even after the ceasefire between Israel and Lebanon was extended. President Donald Trump said after a White House meeting that both sides had agreed to prolong the truce, but the move did little to calm the market.

The main variable remains the closure of the Strait of Hormuz. Continued maritime clashes between the U.S. and Iran have kept a key oil shipping route blocked, deepening fears of supply disruptions.

Before the war, about 20 million barrels a day of crude and petroleum products passed through the strait, making it a critical route for global energy shipments. A prolonged closure could increase pressure across the global energy market.

Commonwealth Bank of Australia said a longer closure would raise the economic cost and increase the likelihood that one side eventually backs down. The bank added that the U.S. is more likely to step back first given the political and economic burden, though the risk of military escalation remains.

Fatih Birol, executive director of the International Energy Agency, described the situation as a serious energy crisis. He said 13 million barrels a day of oil supply has been lost and that major disruptions are also affecting key commodities markets.

He added that the world is facing the biggest energy security threat in history and urged governments to secure alternative energy supplies and strengthen their response capacity.