Hormuz Closure Sparks Oil Market Volatility Amid US-Iran Conflict

The ongoing US-Iran conflict has left oil markets in turmoil, causing prices to surge and tumble unpredictably. The Strait of Hormuz's closure by Iran has been a major shock to the market, with Brent oil prices jumping over 13% after the US-Israeli siege against Iran on February 28.

Jim Burkhard, head of global energy crude oil research at S&P Global, attributes the market's volatility to unexpected surprises. The Hormuz closure was a 'shock', and its impact is felt due to the waterway's crucial role in global oil supply, with about 20 million barrels per day traversing it.

Bob McNally, president of the Rapidian Energy Group and former White House energy advisor to George W. Bush, notes that there was a perception that the US would never allow Iran to close the Strait, making the current disruption 'the biggest in history'. The closure has lowered volumes by about 12.6m barrels per day.

Despite this, markets have been jolted in both directions due to subsequent events, including the US move to blockade Iran's ports and a June 17 agreement between the US and Iran to cease hostilities.