Oil Prices Soar as US-Iran Tensions Escalate Strait of Hormuz Attacks

The global oil market is on edge as tensions between the US and Iran escalate. Recent attacks on vessels in and around the Strait of Hormuz have raised fears of a prolonged disruption to crude shipments from the Middle East.

Brent crude futures rose by $0.54, or 0.54%, to $96.80 a barrel, while US West Texas Intermediate crude gained $0.72, or 0.72%, to $92.14 a barrel. The increase comes after a week of gains, with Brent up 7.8% and WTI jumping nearly 10%.

The Strait of Hormuz is a critical chokepoint through which roughly one-fifth of the world's oil supply passes. Maritime intelligence firm Marisks described the attacks as a 'major escalation in the maritime conflict.' Commercial tankers are now being deliberately used as instruments of reciprocal economic pressure, substantially weakening the previous distinction between military confrontation and commercial shipping.

Data from analytics company Kpler showed an average of 10 commodity ships transited the Strait of Hormuz daily over the past 10 days, the lowest level since May. Iran's Supreme National Security Council secretary, Mohsen Rezaei, said a restricted zone will be announced outside the strait in the coming days.