Iran Seals Strait of Hormuz: Oil Soars Past $120 as War Disrupts Global Supply
Oil and gas prices have spiked dramatically due to the ongoing Iran war, which has thrust the Strait of Hormuz into crisis, disrupting about 20% of global energy flows. Brent crude has surged past $100 per barrel in recent days, hitting 14-month highs amid tanker attacks and shipping halts.
Crisis Overview
The Strait of Hormuz, a narrow waterway between Iran and Oman, handles roughly 20% of the world’s oil and gas shipments, making it a chokepoint vulnerable to conflict. Iran has declared it closed, threatening attacks on any ships attempting passage, with at least four tankers struck by drones recently. Maritime traffic has dropped 80%, as insurers pull coverage and producers like QatarEnergy halt LNG output after strikes on facilities.
Price Surge Details
Brent crude jumped up to 13% early in the week to $82 before settling nearly 8% higher at $79, with further rallies pushing it over $100 as Gulf output cuts deepened. Natural gas markets rallied sharply too, driven by Qatar’s production stoppage. Analysts warn prolonged disruption could embed higher prices structurally, though U.S. strategic reserves might mitigate if needed.
Key Impacts
- U.S. and Israel strikes under “Operation Epic Fury” target Iranian naval assets, sinking or disabling 11 vessels, but Iran’s drones persist.
- President Trump calls price rises a “small price to pay,” while Iran names Mojtaba Khamenei as new supreme leader amid escalation.
- Asian importers face the highest exposure; global balances hold a surplus for now, but infrastructure hits could tighten supply.
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