Oil Prices Surge Above $114 as Strait of Hormuz Crisis Deepens
Oil prices surged above $114 as tensions in the Strait of Hormuz threaten global supply, raising fears of higher fuel costs and economic disruption.
Staff Reporter|Business & Economy Desk
May. 5, 2026
Oil prices have skyrocketed as violence in the Strait of Hormuz casts doubt on the fragile ceasefire between the US and Iran. Brent crude, the major benchmark for global oil prices, climbed about 6% on Monday to $114.44 per barrel, before falling slightly to $113.54 early Tuesday.The uptick came after increased military activity, with the US military claiming to have destroyed six Iranian boats in retaliation to strikes on commercial vessels, while the UAE reported being struck by Iranian missiles and drones. Iran refuted the United States' charges, calling them fake.Markets are pricing in the prospect of greater damage to oil infrastructure and the strait remaining closed for longer than expected. Analysts said that the uncertainty about supply disruptions is a big reason why prices are going up.This isn’t just about oil traders — it’s something people will feel pretty quickly. When prices shoot up like this, it usually means higher fuel costs, more expensive flights, and even pricier everyday goods. The bigger worry is the location: the Strait of Hormuz. If that stays disrupted, it can choke a huge chunk of the world’s energy supply and keep prices elevated.Even though the U.S. President Donald Trump announced that American forces would guide ships through the strait, shipping companies remain hesitant due to safety risks. While two U.S.-flagged ships successfully crossed the waterway, there has been no significant return of commercial traffic.The head of the International Transport Workers’ Federation warned that vessels should not be asked to cross without full safety guarantees, stressing the need for coordinated and transparent measures.Up to 20,000 seafarers remain stranded on around 2,000 ships in the region, according to the International Maritime Organization, which said there is no precedent for such a situation. UThe fragile ceasefire between the United States and Iran appeared to be slipping down, after both sides exchanged additional assaults in the Gulf. Iranian drones and missiles targeted the UAE, and U.S. forces claimed sinking Iranian warships. Trump warned Iran that if it targeted US ships that safeguard trade channels, it would face grave repercussions. Meanwhile, Iran's Foreign Minister, Abbas Araghchi, said recent events demonstrated that there is no military solution to the problem and warned against further escalation. United Nations Secretary-General António Guterres called for restoring freedom of navigation, warning that the disruption is choking global trade and delaying critical shipments.
Analysts think that the recent events are early signs that the ceasefire could completely fall apart, which makes them worried about long-term instability in the area. Oil markets are still very unstable, with prices changing as traders think about the risk of supply problems. On Monday, Brent and U.S. crude futures rose sharply, but the next day they fell a little. Strategists noted that even if there is temporary relief, markets remain skeptical about how quickly tensions will ease, especially given repeated delays in ending the conflict. The Strait of Hormuz is still a major chokepoint, and problems there are still affecting energy markets around the world. It carries about 20% of the world's oil supply. Brent prices have gone up more than 50% since the war started, which means that there is a daily output shortage of almost 14.5 million barrels. Even if a deal is reached, analysts think that costs will stay high because of damage to infrastructure, delayed supplies, and the need to clear out dangerous materials in the area. There is more oil in the world than there is need for, but it is running out quickly. This makes people worry that there won't be enough oil in some places. Goldman Sachs said that mismatches in supply could lead to shortages in some places, especially in Asia and Africa. Energy companies have also issued warnings about potential gasoline shortages as supplies tighten. Experts pointed out that the concern is no longer just growing prices, but also if fuel will be available in the next weeks.
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