Hormuz Dispute Reignites as Iran and US Lock Horns Over Supertanker Incident

The Strait of Hormuz has been at the center of a dispute between Iran and the US, with both sides issuing conflicting statements about a supertanker that allegedly struck mines in the waterway. The Iranian Revolutionary Guard Corps claimed on Monday that a non-compliant tanker hit two naval mines and suffered massive fires, while the US Central Command denied this claim, stating 'this is false.' No ships have hit mines in the Strait of Hormuz, according to CENTCOM.

The market's reaction was muted, with Brent crude rising only 0.87% to $91.28 a barrel. West Texas Intermediate added 0.94% to $86.57. The lack of movement suggests that traders may no longer be concerned about the possibility of mines in the Strait of Hormuz.

A closer look at shipping data reveals that traffic through the strait has decreased significantly, with only five vessels passing through on Tuesday compared to a ten-day average of 14. Not one of these ships was a liquid tanker, and none were carrying oil. This suggests that the market may have already priced in the risk of a closed Strait of Hormuz.

The dispute over Kharg Island, which handles roughly nine-tenths of Iran's crude exports, has raised concerns about the potential for further escalation. The US has threatened to destroy the terminal, while Iran asserts its right to license traffic through the waterway.