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Danske Bank's research team reports that Brent crude oil prices have risen to approximately $124–126 per barrel due to escalating tensions between Iran and the United States, including a U.S. naval blockade. The report highlights that geopolitical risks, particularly the potential disruption of oil shipments through the Strait of Hormuz, are driving supply concerns. Polymarket data suggests only a 20% probability of normalized traffic through the strait by the end of May, intensifying market anxiety.
The situation is critical for global energy markets, as the Strait of Hormuz accounts for about 20% of the world's oil exports. Traders are closely monitoring developments, with any escalation likely to push prices higher. Central banks and investors are also assessing the impact on inflation and economic growth, especially in oil-importing nations.
Looking ahead, the key focus will be on diplomatic resolutions between Iran and the U.S., as well as OPEC+ production policies. A prolonged blockade or military confrontation could trigger a sharp price spike, while a de-escalation might ease pressures. Market participants should watch for updates from OPEC+ meetings and geopolitical developments in the Persian Gulf.
