📈 Global Oil Prices Surge Past US$ 120 Amid Strait of Hormuz Tensions

Global energy markets hit a four-year peak as Brent crude briefly touched US$ 122 per barrel, the highest level since 2022. The price spike follows a 12-day steady climb triggered by the ongoing blockade of Iranian ports and the subsequent disruption of the Strait of Hormuz. • Price Dynamics: Brent crude surpassed US$ 120, a significant rebound from the US$ 90 recorded on 17 April following the brief Israel-Lebanon ceasefire. • Market Sentiment: High-level meetings between the US President and energy executives, including Chevron, suggest a prolonged disruption to global shipping and energy supply chains. • Geopolitical Impact: The US move to extend the blockade on Iran’s economy has led to Iranian threats to continue disrupting traffic through the Strait, a critical artery for global oil futures. • Economic Outlook: The World Bank forecasts a 24% surge in energy prices for 2026 if disruptions persist, potentially matching levels seen during the 2022 Ukraine crisis. • Regional Context: For Sri Lanka, this surge in global energy costs typically exerts pressure on foreign exchange reserves and increases the cost of thermal power generation and transportation. _Source: Based on provisional market data as of May 2026._