The price of Brent crude surged past $107 a barrel on Thursday for the first time in three weeks, before settling back near $105, as the market digested the latest escalation in Washington’s pressure campaign against Tehran. The spike – a 5 per cent intraday jump – came on the heels of a sharp selloff earlier in the week, underscoring the extreme volatility that now defines oil trading as geopolitical signals shift by the hour.

Viewed from Washington, the price action reflects a deliberate dual-track approach by the Trump administration. President Trump on Tuesday extended a ceasefire with Iran but simultaneously ordered the military to maintain the naval blockade of the Strait of Hormuz, through which roughly a fifth of the world’s seaborne oil and liquefied natural gas transits. By Wednesday, the Pentagon had deployed 31 vessels in the blockade, most of them tankers, effectively weaponising maritime traffic as a negotiating chip. The message from the White House is clear: time for a deal is running out, and the cost of intransigence will be measured in barrels.

In Tehran, the calculus is more opaque. Iranian media reports of air defence systems firing in parts of the capital on Wednesday – for reasons still unexplained – briefly rattled markets, fuelling fears of a broader military confrontation. Yet the same day, signals emerged that a new round of talks between American and Iranian negotiators might be imminent. Analysts in London note that this back-and-forth mirrors the pattern seen before the 2015 nuclear accord: brinkmanship designed to extract maximum concessions, but with the added twist of a physical stranglehold on export routes.

The Strait of Hormuz blockade, while not yet total, has already disrupted tanker scheduling and pushed up insurance premiums. Brent’s fall from a high of $107 to $104 by Friday afternoon, triggered by the prospect of renewed diplomacy, suggests the market remains hypersensitive to any hint of de-escalation. Yet the underlying fundamentals are unambiguous: with global inventories lean and spare capacity concentrated in the Gulf, any sustained interruption to flows could send prices hurtling toward $120 or beyond.

Looking ahead, the trajectory hinges on a single variable: whether the Trump administration views the blockade as a prelude to a negotiated settlement or as an end in itself. Should talks collapse, the Strait becomes a flashpoint not just for regional stability but for global inflation. For now, traders are pricing in a premium for chaos – and waiting for the next headline.