Hormuz Strait Geopolitical Shock Triggers 30% Oil Price Surge as Global Markets Brace for Supply Disruptions

Brent crude hits low-90s as Hormuz Strait tensions create a supply-security premium, affecting global energy prices and emerging market growth in 2026.

By: AXL Media

Published: Mar 12, 2026, 6:58 AM EDT

Source: The information in this article was sourced from TUKO.co.ke

The Geopolitical Risk Premium Overriding Market Fundamentals

Global energy markets have entered a volatile risk-premium phase as geopolitical tensions in the Strait of Hormuz begin to dictate price action over traditional supply and demand metrics. Brent crude is currently trading in the low-90s per barrel, representing a significant 30% increase over the past month. This price surge is primarily attributed to the heightened US-Israel conflict with Iran, which briefly pushed prices above the 100 mark earlier this week. According to market analysts, the current price volatility is driven less by pure fundamentals and more by the layers of geopolitical shock impacting a sensitive global market.

Technical Momentum and the Threat of Market Pullbacks

From a technical perspective, both Brent and West Texas Intermediate (WTI) are maintaining an extended uptrend, with their 20, 50, 100, and 200-day moving averages positively aligned. This momentum has pushed the daily Relative Strength Index (RSI) above 80, signaling a crowded long positioning among traders. Financial strategists at Exness suggest that while the trend is strong, such elevated technical levels increase the risk of sharp pullbacks should any positive diplomatic headlines emerge. The market currently finds itself in a state where supply-security risks are overriding an otherwise bearish medium-term setup.

Analyzing Global Demand and Non-OPEC Supply Growth

Despite the current price spikes, the International Energy Agency (IEA) projects that global oil demand growth is structurally slowing, estimated at 0.93 million barrels per day for 2026. Conversely, supply is expected to rise by 2.5 million barrels per day, largely driven by non-OPEC+ producers such as the United States, Brazil, and Guyana. While OPEC+ continues to act as a swing stabilizer, recently adding modest barrels to offset Gulf-related outage fears, the underlying balance appears to be drifting toward a mild surplus. The structural deceleration in demand is largely attributed to efficiency gains and the continued growth of the electric vehicle sector.