Hormuz Conflict Escalates Again, Oil Prices Jump 2%

The conflict in the Strait of Hormuz has escalated again after a month-long lull in fighting. The U.S. resumed military strikes on Iran over the weekend, targeting two rocket launchers on Larak Island that were allegedly being used to launch sea mines into the Strait.

In response, Iran fired missiles at U.S. bases in Jordan, but all eight missiles were successfully intercepted by Jordanian air defense systems.

The rekindling of hostilities caused oil prices to surge 2%, pushing benchmark Brent Crude above $90/barrel for the first time in a while. The war has significantly reduced maritime traffic through the Strait, with only an average of five ships per day traversing it in August, down from over 130 per day before the conflict.

The increase in oil prices has had a positive impact on the stock prices of major oil companies, including Shell (NYSE:SHEL), Chevron (NYSE:CVX), and ExxonMobil (NYSE:XOM). However, Shell's natural gas production has been affected by its co-ownership stake in the Pearl Gas-to-Liquids (GTL) plant in Qatar, which was damaged in an Iranian attack in March.

While higher oil prices may temporarily boost Shell's bottom line and share price, it is uncertain whether this outperformance would last. The stock prices of all major oil companies have largely moved in tandem with crude oil prices throughout the conflict.