Oil nears $100 as Iran conflict and Hormuz restrictions jolt energy flows, inflation fears
Global energy markets swung sharply this week as renewed US military strikes in Iran clouded prospects for a durable truce and kept the Strait of Hormuz partially restricted, pushing Brent crude close to — and at points touching — the $100-a-barrel mark and accelerating a scramble for alternative supplies from the Americas to Asia.
Background: conflict, diplomacy and the Hormuz chokepoint
The latest volatility is rooted in the Iran war and disruptions around the Strait of Hormuz, a critical route for seaborne oil and gas. Several outlets described fragile, stop-start diplomacy: The New York Times reported on May 26 that optimism about a peace deal and reopening the strait was “checked” after the United States said it had struck missile launch sites in Iran. In parallel, political messaging remained maximalist: Middle East Eye reported US President Donald Trump said Iran’s enriched uranium “must be handed over or destroyed” as part of any deal, while Iran’s President Masoud Pezeshkian, quoted by the Tehran Times, said Iran “will not yield to pressure or excessive demands.”
US Secretary of State Marco Rubio added a blunt warning in comments carried by Al Jazeera: the Strait of Hormuz “will open ‘one way or the other’.” (Corriere della Sera also relayed the same line.)
Key developments: prices jump, then ease; trade routes shift
Oil prices spiked on May 26. TASS reported Brent futures were up almost 3% on ICE at $98.9 per barrel, while WTI was down 4.82% at $91.94. The Hindu similarly reported global oil prices gaining about 3% after the US strikes added uncertainty. The Guardian said oil “touches $100 a barrel,” warning the energy market may be past a “point of no return” as peace talks appear stuck in an “endless loop.”
A day later, prices moved the other way: The New York Times reported on May 27 that oil prices fell as an uneasy truce held between the US and Iran—highlighting how sentiment is being whipsawed by battlefield developments and shifting diplomatic signals.
Meanwhile, supply chains are being rerouted. Al Jazeera reported that China and India are among those ramping up imports of Brazilian crude amid Hormuz disruptions. Brazil’s growing role was underscored by Folha de S.Paulo, which said that after the Iran war, Brazil became India’s fourth-largest oil exporter, as Indian refineries sought alternative barrels.
Gas markets are also reacting. TASS reported that US LNG exports hit a record high in March, with the share of shipments to Asia jumping to 24.4% from 14.5% in February—evidence of Asian buyers seeking additional supply as Middle East risk rose.
Implications and reactions: inflation pressure spreads
The shock is feeding through to consumers. The Guardian reported UK shoppers are likely to face higher prices “for many months to come,” citing data showing shop price inflation rising and only 16% of firms left unscathed by the conflict. Middle East Eye reported UK regulator Ofgem said the energy price cap will rise 13% from July.
In France, Le Monde reported the inflationary surge is widening regional inequalities, hitting areas more dependent on diesel, heating oil, or gas. Folha also pointed to pressure on living standards, reporting that real wages are shrinking in more developed countries as the war pushes up prices.
Market signals beyond oil were mixed: Middle East Eye reported gold fell as Iran tensions fueled inflation concerns, suggesting investors were reassessing risk and rate expectations rather than uniformly piling into traditional hedges.
Conclusion: fragile truce, persistent uncertainty
For now, markets are balancing two competing narratives: warnings of prolonged disruption and inflation (from the UK and European reporting, and IEA concerns cited by the Guardian about markets nearing a “red zone”), versus intermittent signs of stabilization as truces hold and alternative supplies ramp up. With Hormuz still only partially functional and US-Iran diplomacy unsettled, the most consistent throughline across sources is continued volatility—and an accelerating reorientation of energy trade toward suppliers like the United States and Brazil.