The global oil market just delivered a jolt few were expecting this quickly. Prices have surged past $90 per barrel, triggered by escalating conflict in the Middle East and disruption to one of the world’s most important shipping routes. For drivers, businesses and governments alike, the ripple effects could be only beginning.
Oil prices jump as supply fears grip markets
Oil traders reacted almost immediately once news spread that shipping through the Strait of Hormuz had been severely disrupted. The narrow waterway sits between Iran and Oman and carries roughly 20% of the world’s crude oil supply. In other words, when something goes wrong there, the entire energy market pays attention. The result was a rapid surge in prices. West Texas Intermediate (WTI) crude climbed around 12% over the week, settling near $90.90 per barrel. The international benchmark Brent crude also surged, closing close to $92.69 per barrel.
For oil markets, that type of weekly jump is extremely rare. In fact, analysts say it marks the largest weekly rise in WTI futures since trading began in 1983, reports ABC News. Even seasoned energy traders — people who have seen decades of volatility — described the move as dramatic. Part of the panic comes from uncertainty. Tankers have reportedly been attacked since the conflict escalated, and Iranian officials warned ships attempting to cross the strait could face further threats.
Petrol prices could soon follow
For Australian motorists, global oil prices are not just a headline — they eventually show up at the bowser. The National Roads and Motorists’ Association (NRMA) said the surge in oil prices was “very worrying,” warning that drivers could soon face higher petrol prices if the trend continues. NRMA spokesperson Peter Khoury said the concern is not just the current spike, but where prices could go next. Australia’s petrol prices are closely tied to Tapis crude, the benchmark used for fuel in the region.
If that benchmark continues rising, local fuel prices could increase quickly. And the timing is not ideal. Many households are already dealing with higher living costs, from groceries to energy bills. A sharp rise in petrol would add another layer of pressure.
Analysts warn of $100 oil — or even higher
Some analysts now believe oil prices could push toward $100 per barrel if tensions continue to escalate.Michael Arone, chief investment strategist at State Street Investment Management, said markets are already moving in that direction. According to economists, the bigger concern is what happens if the conflict drags on. AMP economist My Bui warned that prolonged disruption to oil supply could push prices far beyond $100. In a worst-case scenario, oil could even approach $150 per barrel.
That would not just hurt drivers. Higher oil prices feed into almost every corner of the economy, increasing transport costs, manufacturing expenses and household energy bills.
A broader economic ripple effect
When oil prices surge sharply, the impact rarely stays confined to the energy sector. Higher fuel costs can push up inflation, which in turn affects interest rates and consumer spending. Businesses often delay investments during periods of geopolitical tension, while households cut back on discretionary spending. Economists sometimes refer to this scenario as stagflation — when economic growth slows while prices continue to rise.
For now, markets are watching closely to see whether shipping routes through the Strait of Hormuz stabilise. If they reopen quickly, prices may settle down. But if disruptions persist, the consequences could stretch far beyond the oil market. In short, the world’s energy system just received a reminder of how fragile it can be. And for motorists filling up their tanks in the weeks ahead, the effects may soon become very real.
