LAGOS — Global Brent crude prices breached the critical $120 per barrel threshold Thursday morning, sparking fears of a renewed inflationary spiral and significant shifts in international trade dynamics.
The price surge is primarily driven by escalating geopolitical tensions in the Middle East and a tightening blockade of the Strait of Hormuz, which has stalled approximately 35% of seaborne oil shipments. Market analysts warn that if the disruption persists, the risk premium could push prices toward record highs, further straining global supply chains.
The rally reflects a massive supply-side shock, as international benchmarks have risen over 20% in the last quarter alone. While WTI continues to trade at a discount near $108 per barrel due to U.S. inventory buffers, the global economy remains vulnerable to the rising cost of energy.
For emerging markets and major oil-importing nations, the $120 mark represents a “danger zone” that could force central banks to hike interest rates to combat rising fuel and transport costs. Conversely, major exporters are recalibrating fiscal targets as windfall revenues increase, despite the high volatility.
Industry experts remain cautious, noting that the trajectory of prices in Q2 2026 will depend heavily on diplomatic resolutions and the duration of regional shipping blockades.
