Oil Prices Surge as Iran Closes Strait of Hormuz Following Failed Peace Talks

Global oil markets are facing a severe supply crisis following Iran's closure of the Strait of Hormuz, keeping prices sustained above $80 per barrel. The situation has intensified with the loss of 500 million barrels from global inventories that previously acted as a critical shock cushion. Market experts note the expiration of stabilizing factors, including pre-war surpluses and crude-on-water, which had temporarily anchored prices. Rystad Energy warned that the market has exhausted its absorption capacity and is no longer underreacting to the escalating risks. This supply crunch is further exacerbated by a decline in U.S. drilling activity for the second consecutive week, according to Baker Hughes data. As investors brace for upcoming policy shifts under the Trump administration, the lack of a safety buffer signals imminent and heightened price volatility.