President Donald Trump has intensified the U.S. military engagement in Iran, leading to a sharp increase in oil prices as traders brace for a prolonged conflict that threatens global energy supplies. Following Trump’s announcement that the war would extend for weeks, U.S. crude oil prices surged over 10% to exceed $110 per barrel, with Brent crude climbing more than 6% to surpass $107. Analysts warn that nearly 1 billion barrels of oil could be lost by the end of April, exacerbating existing supply disruptions.

The ramifications for the energy sector are significant, with forecasts indicating a potential total loss of 630 million barrels by June. This ongoing conflict, combined with the closure of the vital Strait of Hormuz, is expected to create sustained upward pressure on oil prices, as market inventories dwindle and demand for stockpiling increases. Fuel shortages are anticipated to ripple across the globe, starting with jet fuel and extending to diesel and gasoline.

Market professionals should prepare for continued volatility in energy prices and potential inflationary pressures as retail gasoline could rise to $4.25 to $4.45 per gallon in the coming weeks, with diesel prices also expected to escalate significantly.

Source: cnbc.com