US-Iran Escalation Sparks Crude Price Surge Amid Strait of Hormuz Concerns
A renewed escalation in tensions between the US and Iran has caused crude oil prices to rise as concerns grow about disruptions to supplies through the Strait of Hormuz.
The latest round of hostilities began with US strikes on Islamic Revolutionary Guard Corps (IRGC) targets, including air defense sites, radar systems, maritime assets, mine-laying capabilities, and communications sites. The IRGC responded by launching missiles against US interests in Jordan, Kuwait, and Bahrain, with 10 of the 13 ballistic missiles intercepted by Jordanian authorities.
The increased tensions have led to a sharp rise in crude oil prices, with Brent futures climbing 0.9% to $95.45 and West Texas Intermediate (WTI) fetching $90.71, up 0.55%. The US energy secretary stated that 17 million barrels of oil passed through the Strait of Hormuz on Monday, but only four vessels transited the strait on Tuesday.
The 'tanker for tanker' policy approved by President Trump saw US forces attack two Iranian government tankers, and officials from the IRGC have threatened Bahrain and Kuwait with retaliatory strikes. The escalating conflict has also weighed on GCC stock markets, with Saudi Arabia's benchmark index declining 0.2%.