Hormuz Tensions Keep Crude Oil Futures Supported Despite Weak Demand

The Strait of Hormuz has become a flashpoint in global oil markets as Iran's actions have kept crude oil futures supported despite weak demand.

Last Friday, Iranian authorities stopped two tankers from leaving the strait and turned four more around. Two very large crude carriers loaded with Gulf cargoes did manage to pass through, but this is seen as a strait operating under Iranian military control, one vessel at a time.

The situation remains tense, with recent events including a drone strike on gas vessels at Egypt's Damietta port and threats from the Houthis against Saudi Red Sea cargoes. In response, Saudi Arabia has proposed a multinational defense coalition for the waterways it needs to keep open.