Oil Prices Climb as Middle East Conflict Sparks Major Supply Disruption Fears

WASHINGTON, April 29 – Global oil prices rose sharply as escalating conflict in the Middle East continued to threaten crude supply routes, raising fears of prolonged disruption in one of the world’s most important energy corridors.

Brent crude for June rose to about $111.78 a barrel, while the more active July contract traded near $104.84, according to Reuters-cited market data. U.S. crude-linked prices also moved higher, with crude trading around $107.44 a barrel on April 29, according to Trading Economics.

The latest rally comes as traders price in the risk of an extended disruption near the Strait of Hormuz, a key route for Middle East oil exports. Reports that the U.S. could extend pressure on Iranian ports added to concerns that supply from the region may remain restricted.

Why Oil Prices Are Rising

The main reason is simple: markets fear that less oil may reach global buyers.

The Middle East remains central to global crude supply. Any disruption around Hormuz can immediately affect shipments to Asia, Europe and other major consuming regions. When traders fear delays, higher shipping costs or reduced exports, they quickly bid up oil futures.

The International Energy Agency said its April outlook was sharply affected by the Iran war, forecasting that oil demand could contract by 80,000 barrels per day this year as high prices and scarcity weigh on consumption.

At the same time, the IEA’s March report projected a major supply shock, saying global oil supply was expected to plunge by 8 million barrels per day in March, with the final impact depending on how long the conflict and flow disruptions continue.

Market Pressure Is Spreading Beyond Oil

Higher crude prices are already affecting businesses. India’s AWL Agri Business said some crude-linked costs had risen about 20% because of the Middle East conflict, showing how oil volatility can quickly spread into fuel, chemicals, packaging and consumer goods.

This is why oil shocks are dangerous for the wider economy. Expensive crude can raise transport costs, electricity costs, food prices and inflation expectations.

Oil Price Prediction: Where Could Crude Go Next?

The near-term outlook remains highly uncertain.

The U.S. Energy Information Administration expects Brent crude to peak around $115 a barrel in Q2 2026, before easing as supply disruptions slowly reduce. It forecasts Brent could fall below $90 a barrel in Q4 2026 and average around $76 in 2027, but says this depends heavily on the duration of the Middle East conflict and oil production outages.

Trading Economics models suggest crude could trade near $97.19 a barrel by the end of this quarter, though that forecast may change quickly if the conflict escalates or shipping routes reopen.

In a more severe scenario, if the Strait of Hormuz remains restricted for longer, prices could stay above $100 and potentially move toward the $115–$120 range. If shipping normalizes and diplomacy improves, prices may retreat sharply, as seen earlier when oil fell after reports that Iran had declared Hormuz open.

Bigger Picture

Oil markets are now being driven by three forces: supply disruption, geopolitical risk, and uncertainty over how long the conflict will last.

Even if physical supply improves, traders may keep a risk premium in prices until there is clear evidence that Middle East shipping routes are safe and stable.