Global oil prices surged sharply to 122 dollars on early Thursday morning. US President Donald Trump refused to budge on a prolonged blockade of Iranian ports. Additionally, the unexpected exit of the United Arab Emirates from OPEC and OPEC+ alliances has played a big role. Consequently, oil blasts past 120 dollars for the first time since 2022. Brent crude climbed above 120 dollars per barrel, briefly touching 122 dollars a short while ago. This marks its highest level in four years.

Market sentiment shifted after senior energy executives met US leadership in Washington. They assessed the economic impact of the ongoing Iran war and rising fuel costs. Commentators on X have interpreted these discussions as confirmation that restrictions on Iranian exports could persist for an extended period. Therefore, oil blasts past 120 dollars as traders price in a longer conflict. Tensions around the Strait of Hormuz continue to disrupt energy logistics. The strategic waterway normally handles roughly one-fifth of worldwide oil and LNG shipments. The current interruption is substantially hurting international markets.

Iran has restricted shipping movements through the Strait following military escalation by its navy. US forces have moved to intercept vessels linked to Iranian ports. The standoff has effectively reduced available oil supply. Prices have risen steadily over the past two weeks. Oil markets have experienced extreme volatility since the war began. Prices briefly eased earlier in April amid ceasefire expectations after talks in Islamabad. However, they quickly reversed course as negotiations stalled and blockade risks intensified. Oil blasts past 120 dollars once again.

A prolonged disruption in Hormuz could tighten global inventories further. The economic fallout could become much worse if energy flows remain restricted. Consumers worldwide will feel this at the pump.