Global Oil Prices Surge Amid U.S.-Iran Hostilities 📈

Global oil benchmarks climbed nearly 12% this week as escalating U.S.-Iran conflict and threats of Red Sea closures intensified supply concerns. • Market Prices: Brent crude futures rose 0.83% to US$ 84.93/bbl, while West Texas Intermediate (WTI) climbed 1.03% to US$ 79.76/bbl, putting both on track for major weekly gains. • Geopolitical Hostilities: Following a broken truce, the U.S. launched consecutive waves of air strikes against Iranian military targets. Iran countered with drone and missile strikes targeting U.S. bases in neighbouring states, while Qatar thwarted an Iranian missile attack early Friday. • Supply Route Threats: Oil flows out of the Strait of Hormuz are restricted. Crucially for global trade, Tehran has directed Houthi allies to prepare to shut down the Red Sea export route if the U.S. targets Iranian infrastructure. • Economic Impact: Analysts note a heavy "geopolitical premium" is embedded in prices. The International Energy Agency (IEA) warned of severe oil security risks if tensions do not ease soon. • Sri Lankan Context: As a net oil-importing nation, Sri Lanka remains highly vulnerable to these global price spikes. Sustained increases in Brent crude could pressure national foreign reserves, disrupt local fuel pricing, and drive up production costs for energy-intensive domestic sectors, including the apparel & textiles and manufacturing industries.