Global oil markets continued their upward momentum, extending one of the strongest rallies in decades as geopolitical tensions in the Middle East keep supply concerns front and center. Benchmark crude prices pushed higher in early trading, supported by ongoing disruptions in key shipping routes and fresh signals from Donald Trump regarding a possible U.S. military withdrawal from Iran.

Brent crude for June delivery rose 1.5% to $105.56 per barrel by mid-morning trading, maintaining its bullish trajectory after an extraordinary surge of more than 60% in March. This marks the sharpest monthly gain for Brent since records began in 1988. Meanwhile, U.S. West Texas Intermediate (WTI) crude for May delivery climbed 1.5% to $102.92 per barrel, following a 51% spike last month, its best performance since mid-2020 during the post-pandemic recovery phase.

The rally has been largely driven by escalating conflict in the Persian Gulf, where supply chains have come under severe strain. Iran has effectively choked off oil shipments through the Strait of Hormuz, a critical artery that typically accounts for nearly 20% of global oil transportation. The disruption has sent shockwaves across energy markets, intensifying fears of prolonged supply shortages.

Adding to market anxiety, Iranian drone strikes reportedly targeted fuel storage infrastructure near Kuwait International Airport, triggering fires and raising concerns about the vulnerability of regional energy assets. The broader conflict, which began on February 28, has already led to significant logistical bottlenecks, higher insurance costs for tankers, and rerouting of shipments, all contributing to upward pressure on prices.

Despite the intensifying conflict, Trump indicated that U.S. forces may soon exit Iran, suggesting a timeline of “two or three weeks” and framing the move as a strategic success. Speaking from the White House, he stated that continued military presence was no longer necessary and emphasized that the situation had stabilized under a “new regime” in Iran. He also reiterated claims that his administration had neutralized Iran’s nuclear ambitions.

However, the geopolitical landscape remains far from stable. Iran’s Revolutionary Guards have escalated rhetoric, warning of potential attacks on U.S.-linked corporate entities operating in the region. Companies named include major global players such as Google, Microsoft, Apple, Intel, IBM, Tesla, and Boeing, signaling a potential expansion of the conflict beyond traditional military targets.

Analysts warn that even if U.S. troops withdraw, the structural risks to global oil supply will persist. The lack of safe passage through the Strait of Hormuz, combined with ongoing attacks on infrastructure, could sustain elevated price levels in the near term. Some estimates suggest that every 1 million barrels per day of disrupted supply could add $5 to $10 to global oil prices, depending on market conditions.

Diplomatic signals remain mixed. Iran’s Foreign Minister Abbas Araghchi confirmed that indirect communications with the U.S. are ongoing but denied that formal negotiations are taking place. Messages are reportedly being exchanged through intermediaries, but no structured peace talks have been initiated.

With crude prices now hovering above the $100 mark and volatility expected to remain high, the global economy faces renewed inflationary pressures. Energy-importing nations, particularly in Asia and Europe, are likely to bear the brunt of rising fuel costs, while central banks may be forced to reassess their monetary policy strategies in response to persistent commodity-driven inflation.