Hormuz Traffic Plummets: Oil Prices Rise Amid Strait of Hormuz Shipping Crisis
Oil prices have risen for four consecutive days due to supply concerns stemming from a sharp drop in shipping traffic through the Strait of Hormuz, which has fallen to just 10 vessels per day. This decline is a 17% decrease from the previous day's traffic and indicates that many ships are diverting their routes via the Bab el-Mandeb Strait instead.
Crude oil prices have increased due to this reduced shipping capacity, with Brent crude trading between $91, $92 and WTI above $85. The situation is being driven by actual transit figures in the Strait of Hormuz rather than data, making it difficult to predict future price movements.
Major institutions are reporting that Iran is internally discussing potential strikes on US targets within Europe and sabotage of undersea cables, further fueling safe-haven buying in crude oil and precious metals. However, these threats are considered a low-probability, high-impact tail risk and the likelihood of actual execution remains limited.
The FOMC minutes are set to be released soon, which could impact interest rate expectations, U.S. Treasury yields, and gold prices. If the minutes are hawkish, U.S. Treasury yields will rise, potentially suppressing gold in the short term and supporting the dollar.