Hormuz Disruption Sends Oil Prices Soaring Amid US-Iran Escalation

Oil prices surged on Monday, September 7, as tensions between the United States and Iran escalated following recent attacks on vessels in the Strait of Hormuz. The conflict has raised fears of a prolonged reduction in oil supplies from the Middle East.

The Brent crude futures price rose by $0.79 (0.82%) to $97.07 per barrel, while U.S. West Texas Intermediate crude increased by $0.80 (0.87%) to $92.28 per barrel. Last week, Brent gained 7.8%, and West Texas Intermediate rose nearly 10%.

The Strait of Hormuz carries about one-fifth of the world's oil supplies, and reduced traffic through the strait could lead to a supply shock. According to analytics firm Kpler, an average of 10 cargo vessels per day passed through the Strait of Hormuz over the past 10 days, the lowest figure since May.

A restricted zone is expected to be declared outside the Strait of Hormuz in the coming days by Iran's Supreme National Security Council. Analysts predict that exports will remain constrained until the end of 2026, followed by a gradual recovery beginning in the fourth quarter of next year.