Brent crude oil prices have approached $85 a barrel, marking their largest weekly gain since April, on heightened tensions between the United States and Iran in the Middle East. Despite this rally, the global benchmark has remained below $90, struggling to break past this threshold amid expectations of continued diplomatic efforts and limited supply disruptions.

The recent spike in prices comes amid renewed military exchanges between Washington and Tehran, which have disrupted energy supply chains in the region, particularly through the Strait of Hormuz. This narrow waterway is critical to global oil flow, with about 20 percent of the world’s crude and petroleum products passing through it. Reports indicated that no oil tankers transited the Strait in either direction on Thursday, further raising concerns about supply stability.

However, Brent crude has been contained near this week’s peak of $87.55, even as the conflict expanded to wider Gulf states. The United States carried out multiple strikes on Iran, which responded with attacks on U.S. military bases in Kuwait, Jordan, and Bahrain. Adding to regional tensions, Qatar announced it intercepted missiles targeting its territory.

Analysts suggest that the market’s relatively muted response, despite the escalating conflict, reflects investor belief in the potential for diplomacy to resume. Chris Weston, Head of Research at Pepperstone, noted that for Brent to break above $90, there would need to be clear evidence of significantly tightening global oil inventories and a sustained breakdown in negotiations between the U.S. and Iran, resulting in prolonged disruption at the Strait of Hormuz.

Visible tanker traffic in the region has slowed significantly, although some shipments continue through ship-to-ship transfers near Oman. Security concerns intensified following Iranian targeting of vessels carrying United Arab Emirates' crude oil. In response, the UAE reportedly sold 8 to 10 million barrels of offshore crude to Asian refiners for loading outside the Strait, aiming to reduce exposure to potential supply interruptions. Furthermore, two tankers linked to Iran transporting cooking fuel have repeatedly altered their courses in the Gulf of Oman and Arabian Sea amid a tightening U.S. naval blockade.

The impact of these geopolitical developments extends beyond crude oil. U.S. refiners have seen profit margins reach record highs due to tightening diesel and gasoline supplies. European fuel markets are also showing signs of strain. Compounding pressures on global fuel supplies, Russia has curtailed diesel exports following Ukrainian attacks on Russian refineries.

Market observers warn that continued disruptions could eventually push up costs for petrol, airline fares, freight, and consumer goods, contributing to global inflationary pressures. Meanwhile, the Yemeni Houthi movement, seen by traders as aligned with Iran’s regional strategy, has issued fresh threats against Saudi Arabian energy infrastructure. However, these have not triggered the level of panic buying typical of past Middle East crises, partly due to expectations that any substantive improvement in U.S.-Iran relations would likely lead to a curtailment of Houthi attacks.

Looking forward, industry watchers are closely monitoring two key factors: whether global oil inventories will decrease sharply enough to indicate a genuine shortage, and whether diplomatic negotiations will collapse, leading to longer-term disruptions of shipments through the Strait of Hormuz. Until these conditions change, Brent crude is expected to remain below the $90 per barrel mark despite the prevailing geopolitical volatility.