Lead Brent crude climbed above $119.50 a barrel, while West Texas Intermediate traded near $107, marking the highest prices since June 2022. The rally reflects the continued uncertainty surrounding the US-Iran conflict and the choke-point at the Strait of Hormuz, tightening the global supply cushion and raising drilling costs for operators worldwide. Context The two-month-old conflict has already triggered a record supply shock, with crude, natural gas and oil products from the Persian Gulf effectively cut off since late February. US domestic oil stockpiles are falling as exports surge to record highs, and the naval blockade remains a key sticking point between Washington and Tehran. Key Data Brent rose more than 7% to trade above $119.50 a barrel, a fresh high since the Iran war began. WTI sits around $107 a barrel. Government data show US oil inventories are declining while exports hit record levels, underscoring the supply crunch. Meanwhile, the United Arab Emirates announced its exit from OPEC, citing the need for agility in a market constrained by collective decision-making. Quotes According to Robert Yawger, director of the energy futures division at Mizuho Securities USA, the market will keep climbing "as long as there is no game plan to end this mess or at least open the Strait of Hormuz." Michelle Brouhard, head of policy and geopolitical risk at Kpler Ltd., told Bloomberg Television that "the stalemate could last for weeks," adding that the situation forces the global market to confront a prolonged shortage. Energy specialist Scott Shelton at TP ICAP Group Plc noted that "it's not surprising to see futures rally to cash prices as the odds of a prolonged conflict become the reality driving forward markets." Outlook With the conflict likely to persist, oil prices may remain elevated, but the US can offset some of the supply gap through increased production. Drilling operators will need to adjust schedules and maintain readiness for potential volatility, while the market watches for any diplomatic breakthrough that could ease the tight supply environment.