Brent crude surged above $109 a barrel this week, marking an 8% weekly gain, as the Strait of Hormuz remained largely blocked and diplomatic efforts to resolve the Iran conflict stalled. West Texas Intermediate (WTI) traded near $105, extending its rally for a third consecutive session. The disruption at the world’s most critical oil chokepoint, through which about one-fifth of global supply normally flows, has slashed tanker traffic dramatically—flows of crude and fuels fell by almost 6 million barrels a day in the first quarter, according to the U.S. Energy Information Administration.
The geopolitical backdrop intensified after President Donald Trump declared on Truth Social that the “military decimation of Iran (to be continued!),” signaling waning patience with the ceasefire. Despite a truce since early April, flareups persist and a lasting resolution seems distant. The International Energy Agency warned that global oil markets could remain “severely undersupplied” through October, even if the conflict ends next month. Analysts, such as Dennis Kissler of BOK Financial Securities, noted that “the path of least resistance very near term for prices remains more to the bullish side” as inventories continue to contract.
Simultaneously, a two-day Trump-Xi summit in Beijing concluded without major concrete agreements on trade or energy. While both leaders agreed the Strait of Hormuz must stay open and Xi expressed interest in buying more U.S. crude, China’s official readout did not include energy among the topics discussed. Trump’s subsequent signals of renewed Chinese buying added speculative fuel to oil markets but lacked confirmation.
For crypto markets, the surging oil price and geopolitical instability introduce fresh uncertainty. Higher energy costs can feed inflation expectations, potentially forcing central banks to maintain tighter monetary policy—historically a headwind for risk assets like Bitcoin. However, the narrative of Bitcoin as a store of value could also attract safe-haven flows if tensions escalate further. Traders are watching bond markets closely after a broad selloff indicated fears of persistent price pressures. The interplay between oil-driven inflation and central bank responses will likely dictate near-term sentiment for digital assets.
