The sharp increase reflects a sustained rise in crude oil prices, driven by the effective closure of the Strait of Hormuz, a critical oil transit chokepoint through which roughly a fifth of global oil supply typically flows. Tankers stranded in the region have curtailed deliveries, constraining supply and pushing benchmark oil prices higher.

Market analysts say the price trajectory briefly softened in mid-April amid expectations of a potential ceasefire. “There was optimism that this could mark the beginning of the end of the conflict,” said Rob Smith, director of global fuel retail at S&P Global Energy, noting that crude and gasoline prices temporarily declined before reversing course as hostilities persisted.

Crude oil accounts for the largest share of gasoline costs in the United States, representing about 51 percent of pump prices in 2025, according to the US Energy Information Administration. Taxes contribute roughly 17 percent, while refining, distribution, and marketing costs make up the remainder.

The International Energy Agency has described the disruption linked to the Strait of Hormuz as the largest supply shock in oil market history, with prices reaching as high as $112 per barrel in early April. Analysts note that gasoline prices tend to track crude movements closely, with minimal lag.

Additional upward pressure followed US actions in April to block Iranian oil exports, a move analysts say removed a key supply source from global markets. “Iran had been moving an unusually high amount of oil to global markets, which helped moderate prices,” said Jim Krane, an energy research fellow at Rice University’s Baker Institute, adding that the restrictions intensified price pressures.

Energy markets have remained highly sensitive to geopolitical developments, with fluctuations tied to reports of attacks in the Arabian Gulf or shifts in diplomatic efforts. “The oil market is exquisitely sensitive to what’s coming out of the White House,” said Bob Kleinberg, a research scholar at Columbia University’s Center on Global Energy Policy.

The pace of price increases has echoed previous geopolitical shocks, including a 48-cent weekly rise at the outset of the Iran conflict. However, analysts caution that no near-term relief is likely, as prolonged constraints in the Strait of Hormuz are expected to sustain upward pressure on prices.

Even in the event of a durable resolution, market participants say a return to pre-war pricing levels could take months due to lingering risk premiums associated with shipping through the region and heightened insurance costs for oil transport.

Speaking in Canberra after talks with Australian Prime Minister Anthony Albanese, Takaichi said both countries would act with urgency to strengthen energy security amid a supply squeeze linked to reduced shipping through the strait.

Roughly one-fifth of the world’s oil typically transits through the Strait of Hormuz, with flows curtailed after Iran throttled shipping following attacks by the United States and Israel. About 80 percent of that oil is destined for Asia, according to the International Energy Agency.

“The effective closure of the Strait of Hormuz has been inflicting enormous impact on the Indo-Pacific,” Takaichi told reporters, adding that Japan and Australia would maintain close communication to respond to the situation.

Both governments said they would seek to enhance resilience and autonomy in energy supply chains. Australia is Japan’s largest supplier of liquefied natural gas, while Japan provides a share of refined fuel products, including diesel, to Australia.

The two sides issued a series of agreements covering energy, economic cooperation, defense and critical minerals. Albanese said the measures would help shield Australia from “global shocks” stemming from conflict in the Middle East.

Japan has also emphasized the importance of securing stable supplies of critical minerals used in semiconductors, electric vehicle batteries and defense systems. Australia has positioned itself as a key supplier of such resources, highlighting its reserves as an alternative to concentrated global supply chains.

Defense cooperation has expanded alongside economic ties, including a deal valued at around Aus$10 billion for Japan to supply Mogami-class stealth warships to the Australian navy.

In a separate foreign policy address in Vietnam over the weekend, Takaichi reiterated Japan’s commitment to a “free and open Indo-Pacific,” a strategy aimed at strengthening regional security and supply chain resilience.
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The waiver replaces a previous 30-day authorization that expired on April 11 and permits transactions involving Russian crude and petroleum products already loaded at sea, while continuing to exclude dealings tied to Iran, Cuba and North Korea.

The move follows pressure from energy-importing countries, particularly in Asia, grappling with supply disruptions and elevated costs.A Treasury spokesperson said the decision was linked to broader efforts to stabilize markets as diplomatic engagement with Iran intensifies. “As negotiations with Iran accelerate, Treasury wants to ensure oil is available to those who need it,” the spokesperson said.

The extension marks a reversal from comments made earlier in the week by Treasury Secretary Scott Bessent, who had indicated the administration would not renew waivers covering Russian and Iranian oil. The Iranian waiver, issued on March 20, had facilitated the flow of roughly 140 million barrels into global markets, according to Bessent’s prior statements.

Global oil prices fell about 9% on Friday to around $90 per barrel after Iran temporarily reopened the Strait of Hormuz, a critical transit route for global crude supplies. However, the conflict now entering its eighth week has already caused extensive disruption, with more than 80 oil and gas facilities in the Middle East reported damaged, according to the International Energy Agency.

Tehran has warned it could again close the strait if U.S. naval actions targeting Iranian ports continue, raising the risk of renewed supply shocks. The war has been described by the agency as the most severe disruption to global energy supply in history.

The administration’s decision also reflects domestic political pressures, as elevated fuel prices pose risks to Republican candidates ahead of the November midterm elections. U.S. officials said the issue was raised during meetings on the sidelines of G20, World Bank and International Monetary Fund gatherings in Washington, where partner countries urged continued flexibility on supply.

Trump also discussed oil markets during a recent call with Narendra Modi, whose country remains a major importer of Russian crude.The waiver has drawn criticism from lawmakers across party lines, who argue it risks undermining sanctions aimed at curbing Russia’s revenue from its war in Ukraine while also easing pressure on Iran during its confrontation with the United States.

European officials have voiced similar concerns, with Ursula von der Leyen stating that sanctions relief would be premature.Russian presidential envoy Kirill Dmitriev said the policy signaled ongoing economic and energy engagement between Washington and Moscow, adding that earlier waivers could release volumes equivalent to nearly a day of global oil output.

Analysts said the measure underscores the limited policy options available to policymakers confronting simultaneous geopolitical crises and market instability. Brett Erickson of Obsidian Risk Advisers said the damage to global energy systems may be enduring, warning that “the tools available to stabilize them are nearly exhausted.”

Authorities in Russia’s Leningrad region confirmed that additional mobile fire units would be deployed to protect strategic facilities, including the major Baltic ports of and , which have faced repeated attacks in recent weeks. Governor said the units would include reservists serving on voluntary contracts, tasked specifically with countering unmanned aerial vehicle (UAV) threats.

Kyiv has described the strikes as retaliatory measures against Russia’s sustained aerial bombardment of Ukrainian cities. Ukrainian forces have increasingly targeted Russia’s energy infrastructure, aiming to disrupt export revenues that remain a key source of funding for Moscow’s war effort.

The attacks have had a measurable impact on Russia’s oil logistics. According to data cited by the Center for Research on Energy and Clean Air, oil shipments from Ust-Luga and Primorsk fell by roughly half in the week following a March 23 drone strike compared to the same period a year earlier.

Despite these disruptions, Russia’s oil revenues have shown resilience. The reported that Russian oil export earnings nearly doubled to $19 billion in March, reflecting elevated global prices amid broader geopolitical tensions, including conflict in the Middle East.
President had previously authorized the use of reservists to guard energy infrastructure under legislation signed last year, as Ukraine expanded its use of long-range drones to strike deeper into Russian territory.

The intensifying exchange of strikes underscores a shift in the conflict toward targeting economic assets, with both sides seeking to degrade the other’s capacity to sustain prolonged military operations.

IEA Executive Director Fatih Birol said that while March deliveries largely reflected cargoes loaded before the crisis escalated, the situation has shifted significantly. “During the month of April, nothing has been loaded,” he told reporters following meetings at the International Monetary Fund, adding that prolonged disruption would intensify market pressures.

Birol said the agency is tracking damage to energy infrastructure across the region, noting that more than a third of over 80 affected facilities have sustained severe damage. He described the situation as a major energy security challenge with global implications, warning that no country would be insulated from the fallout.

IMF Managing Director Kristalina Georgieva said there is an urgent need to assess the scale of economic impact stemming from infrastructure losses tied to the conflict.World Bank President Ajay Banga said the institution is preparing for multiple scenarios depending on the duration and intensity of hostilities, including expanded financial support.

The IMF has indicated it can make up to $50 billion available, while the World Bank has outlined potential financing of up to $25 billion, with the possibility of increasing total support to $60 billion over six months if conditions worsen.

The conflict, triggered by U.S.-Israeli strikes on Iran beginning February 28, has disrupted flows through the Strait of Hormuz, a critical artery for global oil shipments. Iran’s actions to impede maritime traffic, followed by a U.S. naval blockade, have heightened concerns over supply constraints and price volatility.

Although a two-week ceasefire was agreed last week to enable negotiations, talks in Islamabad failed to produce a breakthrough, raising uncertainty over whether the truce will hold.

International mediators, including Pakistan and Qatar, have urged both sides to maintain the ceasefire, while UN Secretary-General Antonio Guterres called for the restoration of freedom of navigation in the region.

Managing Director Kristalina Georgieva said the war had caused the most severe disruption to global energy supply on record, with millions of barrels of oil production shut down due to Iran’s effective closure of the Strait of Hormuz.

“Instead, all roads now lead to higher prices and slower growth,” Georgieva told Reuters, adding that the IMF would cut its growth forecasts and raise inflation projections in its upcoming World Economic Outlook.

The conflict is expected to dominate discussions at next week’s IMF and World Bank spring meetings in Washington, where policymakers will assess the economic fallout from the crisis.

The Fund had previously anticipated a modest upgrade to global growth projections before the escalation.Georgieva said global oil supply had fallen by about 13%, with knock-on effects extending beyond energy markets into supply chains for commodities such as fertilizers and helium.

Brent crude prices have risen to around $110 per barrel, reflecting tightening supply conditions.She warned that even a swift resolution would leave a lasting economic impact, while a prolonged conflict would deepen inflationary pressures and further dampen growth prospects.

The effects are expected to be uneven, with energy-importing countries facing the greatest strain. Many low-income economies lack the fiscal capacity to cushion rising costs, increasing risks of economic instability and social unrest.

Georgieva said some countries had already sought financial assistance from the IMF, which could expand existing lending programs to address urgent needs. She cautioned against broad energy subsidies, arguing they could exacerbate inflation.Energy exporters have also been affected.

Damage to production infrastructure has slowed output recovery in some countries, including Qatar, where restoration of natural gas capacity could take several years.The IMF is coordinating with other global institutions, including the International Energy Agency and the World Bank, to assess the broader implications of the conflict.

Georgieva also highlighted risks to food security, noting that disruptions to fertilizer supplies could trigger wider shortages if the conflict continues.

The World Food Programme has warned that millions could face acute hunger if conditions worsen.

In a televised address, Trump said U.S. forces had delivered “swift, decisive” results during 32 days of operations launched after joint U.S.-Israeli strikes on Iran on Feb. 28. He added that Washington was “on track to complete all of America’s military objectives shortly,” while warning of further heavy attacks if no agreement is reached.

The conflict has triggered widespread regional instability, with Iranian retaliatory strikes targeting Israel, U.S. bases and Gulf states, and opening a parallel front in Lebanon. Thousands have been killed across the region since the escalation began.

Trump reiterated that the U.S. military campaign aimed to neutralize Iran’s strategic capabilities, including its nuclear program, saying recent strikes had prevented Tehran from obtaining nuclear weapons. He did not provide evidence to support the claim.Despite the escalation, diplomatic prospects remain uncertain.

A senior Iranian source told Reuters that Tehran is demanding a guaranteed ceasefire before halting its attacks and has not engaged in indirect talks on a temporary truce. Iran has also denied U.S. assertions that it requested a ceasefire.

Iranian President Masoud Pezeshkian, in a message addressed to the American public, said Iran holds no hostility toward ordinary U.S. citizens, though official positions suggest limited willingness to enter negotiations at this stage.The war has disrupted global energy markets, particularly after Iran effectively shut the Strait of Hormuz, a critical route for roughly 20% of global oil and gas shipments.

Trump dismissed the strategic necessity of the passage for the United States and urged allies dependent on Gulf energy supplies to take steps to reopen it.Financial markets reacted negatively to the lack of a clear diplomatic roadmap, with global equities falling and oil prices rising following Trump’s address.

The International Monetary Fund, World Bank and International Energy Agency warned the conflict was having “substantial, global and highly asymmetric” economic effects and signaled coordination on potential support measures.U.S. officials said backchannel discussions involving intermediaries, including Pakistan, were ongoing, though no breakthrough has been reported.

Trump indicated he remained open to a deal but warned that failure to reach one could result in expanded strikes, including potential targeting of Iran’s electricity infrastructure.The U.S. president also renewed pressure on allies, suggesting countries reliant on Middle Eastern energy should take a more active role in ensuring maritime security in the region.

European officials, however, have cautioned against military operations in the Strait of Hormuz, citing concerns over international law.

Trump has also raised the prospect of reassessing U.S. commitments to the NATO, criticizing what he described as insufficient support from European allies in addressing the crisis.

The region, which imports more than 80% of crude shipments passing through the Strait of Hormuz, has been hit hard after disruptions linked to Iran’s actions since the conflict began on Feb. 28, tightening global supply and pushing policymakers to consider demand-curbing steps.

No country has formally reinstated remote work mandates, but officials say such measures are under active review. South Korea’s Energy Minister Kim Sung-whan said authorities would consult relevant ministries on expanding work-from-home policies, aligning with recommendations from the International Energy Agency.

IEA Executive Director Fatih Birol reiterated calls this week for reduced travel and remote work, citing earlier precedents such as Europe’s response to the Russian invasion of Ukraine, where demand management helped offset supply disruptions.

South Korea has also launched a public campaign encouraging households to cut energy use, including reducing shower times and shifting electricity consumption to off-peak periods.

Across the region, governments have begun implementing targeted measures to stretch limited fuel supplies. The Philippines has shortened the work week for some public offices, with President Ferdinand Marcos Jr declaring a national energy emergency over risks to supply.

Pakistan has temporarily closed schools and expanded remote work for office staff, while Sri Lanka introduced a weekly public holiday to conserve fuel.Other economies are focusing on efficiency measures rather than mobility restrictions.

Singapore has urged businesses and households to adopt energy-efficient appliances, increase air-conditioning temperatures and accelerate electric vehicle usage.

In Thailand, Prime Minister Anutin Charnvirakul has ordered civil servants to limit overseas travel, adjust office cooling levels above 25°C and adopt remote work where possible.

The policy responses echo pandemic-era strategies aimed at reducing energy demand, as governments across Asia attempt to cushion the economic and supply shocks stemming from the ongoing conflict.