Brent crude tops $120/barrel

Oil is back in the part of the map where everything else starts to wobble. Brent crude pushed above $120 a barrel this week for the first time since June 2022, then cooled on Friday — but the real story is not one headline print. It’s that the market has spent two months repricing what happens when a huge chunk of the world’s oil trade can’t move normally through the Strait of Hormuz. Once that bottleneck stays broken long enough, the shock spreads outward — into shipping, refining, jet fuel, gasoline, inflation, and central-bank nerves. (markets.ft.com) ### Why did Brent jump now? The immediate move was about persistence, not surprise. Traders have been dealing with Middle East disruption since late February, but this week the market looked over the next hill and saw no quick reset. Brent hit a 52-week high of $126.41 on April 30 before dropping back to about $108.42 on May 1, which tells you how violent and uncertain the repricing has become. (markets.ft.com) ### Why is Hormuz the hard part? Because Hormuz is not just another shipping lane. It is the main export route for oil from Saudi Arabia, the UAE, Kuwait, Qatar, Iraq, Bahrain, and Iran. The IEA says about 20 million barrels a day of crude and oil products moved through the strait in 2025 — roughly a quarter o(markets.ft.com)ransit but also access to much of the spare capacity that would normally calm the market. (iea.org) ### How big is the supply hit? Big enough that even veteran energy watchers are using extreme language. The IEA has said the conflict has cut Hormuz export volumes to less than 10% of prewar levels, forcing shut-ins across the region. Another Reuters analysis cited by EnergyNow says around 12 million barrels a day(iea.org)e and started looking like a real physical squeeze. (iea.org) ### Why does Brent move more than WTI? Because Brent is the seaborne benchmark, and this is a seaborne disruption. EIA noted that Brent rose faster than WTI in March because Brent was more exposed to higher shipping costs and broken trade flows near Horm(iea.org)31 — the widest in more than five years. Basically, U.S. crude is partly sheltered; globally traded crude is not. (eia.gov) ### Where does the pain show up first? In refined products. EIA says gasoline, distillate, and jet-fuel spot prices all jumped sharply in the first quarter as crude and product exports from the Middle East were disrupted. That matters because consumers and airlines do not buy “Brent” — they buy gasoline, diesel, and jet fuel. Oil shocks b(eia.gov)ces stay high long enough. (eia.gov) ### Why not just drill more? That’s the catch. U.S. producers cannot flip a switch, and the biggest listed majors are not rushing to abandon their existing plans. Financial Times says Exxon and Chevron are sticking to prewar strategies despite White House pressure to boost output. High prices help revenues, but they do not instantly create new barrels, pipelines, crews, and export capacity. (ft.com) ### Does $120 oil still break the economy? Less than it used to — but it still hurts. Reuters analysis says the global economy is less oil-intensive than in the 1970s, and the inflation hit from a big oil shock is probably smaller than it once was. But “smaller” is not “small.” If inventories keep drawing and the disruption lasts, energy can still shove headline inflati(ft.com)nputs can. (energynow.com) ### Bottom line The important fact is not that Brent touched $120 once. It’s that the market is trading a world where a core artery of the oil system stays impaired, inventories keep shrinking, and the usual relief valves are weak. If that picture holds, the next move in oil will matter far beyond energy desks. (ft.com)