The Strait of Hormuz transmits about 20% of the world's oil consumption.

The recent Iranian military posturing has increased the risk of a blockade, which could lead to millions of barrels being pulled from the market daily.
As a result, traders are pricing crude oil with a higher risk premium, which directly supports the price of West Texas Intermediate crude.
The surge above $98 reflects this renewed concern, and also shows that geopolitical risks can quickly surpass fundamental supply data.
OPEC+ production increase creates initial downward pressure
The OPEC+ alliance, led by Saudi Arabia and Russia, confirmed an increase in production for April 2025.
The alliance agreed to add 411,000 barrels per day to the market.
This decision comes after months of strict supply management.
The increase aims to calm rising prices and meet the demands of consuming countries.
However, the market had already priced in this expectation, so the short-term price decline was limited.
Soon, the risks related to the Hormuz field overshadowed the impact of the production increase.