Brent crude has climbed to its highest level since January 2025, and the ripple effects are already being felt worldwide. The biggest concern centres on the Strait of Hormuz, a narrow but critical shipping lane off Iran’s southern coast.
Around one-fifth of the global oil supply passes through the strait. Iran’s threats to vessels in retaliation for the attacks have effectively halted traffic. From our perspective as motorists and households, that bottleneck translates quickly into higher fuel prices and broader cost pressures.
With Middle Eastern exports constrained, refiners are scrambling to secure alternative supplies. Heavier crude grades from the United States, Canada and Venezuela have jumped to multi-year highs as buyers rush to replace similar quality barrels from the Gulf.
Mars sour crude from the US Gulf of Mexico has traded at its strongest premium to West Texas Intermediate in years. Other grades like Heavy Louisiana Sweet have also surged, signalling intense demand for heavier oil typically used to produce diesel.
In Europe and Africa, heavier crudes like Mandji and Johan Sverdrup also moved sharply higher. Meanwhile, Iraq has warned it may need to cut output by more than three million barrels per day if tankers cannot access Gulf loading points. Major Asian refiners that rely on Iraqi Basrah crude are now seeking substitutes , potentially tightening markets even further.
In the United States, gasoline prices have risen above three dollars per gallon for the first time since November. Diesel prices have climbed even more steeply, reflecting the Middle East’s importance as a diesel supplier. Diesel matters not just for trucks and logistics, but for food prices and goods transported across long distances.
There are signs that buyers are shifting toward North American supply. The Trans Mountain pipeline in Canada, which exports heavy crude from Alberta to the Pacific coast, could see stronger demand if tensions persist. Venezuelan barrels are also being offered at higher prices.
When geopolitical conflict disrupts a major supply artery, the consequences spread quickly. For households already dealing with inflation, another surge in energy prices adds yet more pressure to already stretched budgets.
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