Crude oil prices have rallied sharply in recent weeks, with Brent crude climbing to around $96-$99 per barrel, its highest level in nearly one and a half months, while US WTI crude has moved above $90 per barrel.

The primary driver behind the rally has been renewed tensions between the United States and Iran, which have revived concerns over global oil supplies and tanker movements through the Strait of Hormuz, a key route for global energy trade.

While actual supply losses remain limited, fears of disruptions have led traders to build a sizeable geopolitical risk premium into prices.

US-Iran Tensions Add Risk PremiumThe latest leg of the oil rally has been driven by escalating military tensions between Washington and Tehran.

Recent exchanges of strikes and threats targeting strategic assets in the Gulf have heightened fears of a broader conflict.

Investors worry that prolonged hostilities could affect oil production, export infrastructure, or shipping routes in the region.

Although the conflict has not yet significantly disrupted physical supplies, the possibility of escalation has forced traders to price in additional risks.

Impact on Global SupplyGlobal oil supplies remain largely intact, but concerns about future disruptions continue to dominate market sentiment.

The Persian Gulf accounts for a substantial portion of global crude exports, and any threat to shipments from major producers such as Saudi Arabia, Iraq, Kuwait, and the UAE could tighten supplies quickly.

Strait of Hormuz Remains a Key ConcernThe Strait of Hormuz continues to be the focal point of global oil markets.

Tanker traffic has not stopped, but shipping activity remains uneven due to security concerns and isolated attacks on commercial vessels.

Reports indicate that operators remain cautious, resulting in occasional disruptions and higher transportation costs.

Since nearly one-fifth of global oil trade typically passes through Hormuz, even minor disturbances can create significant price volatility.

Demand Remains SupportiveDespite concerns over global growth, oil demand remains relatively healthy.