Oil prices surpassed $126 a barrel on Thursday morning, its highest price since 2022, as President Donald Trump mulls an extended blockade of Iranian ports.

Brent crude, the global benchmark, was up more than 12% overnight into Thursday, before paring some gains to trade at $124 as of 2:28 am Thursday. WTI crude, the US benchmark, was up more than 3%, surpassing $110 per barrel.

The latest surge comes as the national average US gas price reached a four-year high of around $4.23, according to AAA data, as a result of the skyrocketing energy prices triggered by the US-Iran war, which has driven prices up more than 27%.

Global crude prices have risen in recent days as face-to-face negotiations between the US and Iran broke down, keeping the Strait of Hormuz – a critical oil and gas shipping channel – effectively shut still.

In a meeting between Trump and his top advisers, the president said he wanted the US naval blockade of Iranian ports to continue, sources familiar with the talks told CNN, and his team has begun laying the groundwork for such an extension, including a longer-term closure of the Strait of Hormuz.

Iran has dismissed the impact of the US naval blockade, with the government saying there is “no worry” about the steady supply and distribution of fuel.

“The enemy will achieve nothing through a naval blockade of Iran,” said Iranian Oil Minister Mohsen Paknejad, who urged the public to cut consumption as the country launches a broad energy-conservation campaign.

However, the possibility of further military escalation in the Middle East has put traders on alert, said Janiv Shah, vice president of oil markets at Rystad Energy.

“Further escalation and any attacks on energy infrastructure could force benchmarks to gain rapidly,” Shah said. “Elements of demand destruction are already visible globally, which could accelerate with higher prices.”

Daily transits through the Strait of Hormuz have reduced to near zero since the war began in late February, resulting in what the International Energy Agency called the “largest supply disruption in history.”

Since the US and Iran reached a temporary ceasefire in early April, there has been a slight increase in the number of oil and gas tankers transiting through the strait, though they remained at single digit level, according to data from S&P Global Market Intelligence.

The prospect of prolonging the halt on Middle Eastern energy exports bodes poorly for the global economy, which is already suffering from fuel shortages, rising inflation and dampened consumer activity.

With the Strait of Hormuz effectively closed for the past two months, analysts said that energy markets may take as long as a year to recover to normal supply and demand balances. Economists have warned that if the disruption extends into the second half of the year, it could trigger a global recession.

As oil prices climb, consumers will likely also face higher prices for everyday products that require energy to manufacture and materials derived from petroleum such as plastic, synthetic rubber or textiles. The current market shortage is already squeezing supplies of items like medical gloves, instant noodles and cosmetics, particularly in Asia, which imports most of its energy and makes most of the world’s goods.

With the June Brent contract set to expire at the end of Thursday’s session, trading volume has shifted to the July futures. That more active contract pushed above $113 a barrel Wednesday night. (CNN)