Global oil prices surged Monday morning, rising as much as 10 percent to briefly exceed $82 a barrel, following reports of attacks on ships near the Strait of Hormuz and heightened tensions in the Middle East. The price of Brent crude settled at $79 a barrel, while US-traded oil rose around 7.6 percent to $72.20, according to market data.
The surge followed claims by Iran’s Islamic Revolutionary Guard Corps (IRGC) that they had struck three US and UK oil tankers in the Gulf and the Strait of Hormuz, alongside missile and drone attacks on military bases and civilian infrastructure across the region. The UK Maritime Trade Operations Centre (UKMTO) reported that two vessels had been struck, and a third experienced a near miss from an unidentified projectile.
Shipping data indicates hundreds of vessels, including oil and gas tankers, have dropped anchor in waters near the Strait of Hormuz as traders brace for further disruption. An official from the European Union’s naval force Aspides told Reuters that vessels had received radio transmissions from Iran’s Revolutionary Guards stating that “no ship is allowed to pass the Strait of Hormuz,” though Tehran has not formally confirmed any such order.
The Strait of Hormuz, a narrow waterway between Iran and Oman, is a critical chokepoint for global energy supplies, carrying roughly 20 million barrels of oil per day – approximately one-fifth of the world’s seaborne crude. It also carries around 20 percent of global liquefied natural gas, much of it originating from Qatar. Analysts at Rystad Energy estimate the effective halt of traffic through the strait is preventing 15 million barrels per day of crude oil from reaching markets.
The escalating conflict has also impacted financial markets. Airline shares across Asia fell sharply, and investors have moved into the dollar and gold as a safe haven. The price of gold rose 2.3 percent to $2,395.99 an ounce. In London, the FTSE 100 opened nearly 1 percent down, with larger drops seen in European markets, including a 1.6 percent fall in France’s CAC-40 and a 1.7 percent drop in Germany’s Dax.
While the initial surge in oil prices eased slightly, with Brent crude falling back from its peak, international shipping remains almost at a standstill at the entrance to the Strait of Hormuz. Analysts are warning that a prolonged conflict could push energy prices even higher. Saul Kavonic, head of energy research at MST Marquee, told the BBC, “The market isn’t panicking…There is more clarity that so far, oil transport and production infrastructure hasn’t been a primary target by any side.”
Iran had temporarily shut down parts of the strait in mid-February for a military drill, raising concerns about potential future disruptions. The current situation follows a series of attacks by the United States and Israel on Iranian targets, and retaliatory strikes by Iran against those nations and their allies.
