Oil Prices Cross $91, Raising Market Volatility Fears

Oil prices have risen more than 2% over the past week, reaching their highest level in six weeks as the expiry of the Iran-US ceasefire has raised fears of a renewed conflict and further volatility in global energy markets.

Investors are increasingly concerned that a fresh conflict could continue for an extended period, potentially disrupting oil supplies and pushing prices higher.

Trading Economics reported that US West Texas Intermediate (WTI) crude rose 0.79% to $85.25 a barrel on Tuesday. London-traded Brent crude, however, fell 0.44% to $81.23 a barrel. Despite the mixed daily movement, oil prices have gained more than 2% over the past week.

The United States and Iran initially agreed to a two-week ceasefire on April 8, 2026. The two sides later held talks with Pakistan acting as a mediator. On June 17, they signed a memorandum of understanding for a 60-day ceasefire and temporarily agreed to consider extending the truce.

However, neither side now appears willing to extend the ceasefire. As uncertainty increased, Iran warned that it could shift to a “fully offensive” military posture, while the United States also refused to extend the truce.

The developments have raised concerns that the conflict could spread further across the Middle East, with the Strait of Hormuz emerging as a major concern for global oil markets.

The strategic waterway carries a significant portion of the world’s oil supplies, but tanker traffic has fallen sharply amid the lack of progress in US-Iran talks.

Only five oil tankers passed through the Strait of Hormuz last Saturday, while none crossed the waterway on Sunday. By comparison, 31 tankers passed through the strait on the previous Sunday.

A prolonged disruption in the Strait of Hormuz could further restrict global energy supplies and push oil prices higher. Fresh attacks by Houthi militants in the Red Sea have also added to concerns over oil supply disruptions.

Rising oil prices have intensified fears about global inflation. The yield on the US 10-year Treasury note climbed to 4.728%, while the yield on the 30-year bond rose to 5.315%, its highest level in nearly two decades.

Higher oil prices could increase inflationary pressure and raise the possibility that central banks will keep interest rates elevated for longer.