Israel-Iran War Causes Moderate Oil Price Spike Amid Strait of Hormuz Tensions

The recent Israel-Iran conflict led to a moderate increase in oil prices, peaking around $81.40 per barrel, but the spike was contained and prices soon returned to pre-conflict levels following a ceasefire announcement by President Donald Trump. Despite significant geopolitical risk, the feared disruption of the Strait of Hormuz, a critical passage for nearly 20% of global oil supplies, did not materialize, reflecting greater market efficiency and a reduced risk premium for Middle East tensions. Analysts and officials, such as Ghana's energy advisor Dr. Yussif Sulemana, view the decline in crude prices and the ceasefire as a positive development that could stabilize fuel prices and inflation locally. The Israeli strike on Tehran's Evin prison marked a significant escalation, targeting regime symbols rather than just military sites, intensifying Iranian retaliation threats and raising concerns about potential regional war and energy market volatility. However, the market's restrained reaction compared to historical conflicts indicates the Middle East's declining dominance over global oil price dynamics amid shifting geopolitical and economic factors. The outcome of this conflict and Iran's potential decision on closing the Strait of Hormuz remain critical variables for future energy market stability.