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Oil prices surge more than 3% as US-Iran strikes fuel Hormuz fear

From Jerusalem Post · () English

Summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Oil prices surged over 3% due to renewed US-Iran military strikes, raising concerns about energy supply routes through the Strait of Hormuz.
  • Brent crude futures rose 3.14% to $78.40, and WTI crude climbed 3.04% to $73.58 per barrel.
  • US Central Command stated its strikes targeted Iranian air defense and radar systems to limit Tehran's ability to attack the Strait of Hormuz, a vital global trade corridor.

Oil prices experienced a significant jump of over 3% on Monday, driven by renewed military strikes between the United States and Iran. These actions have reignited concerns regarding the security of energy supplies transiting the Strait of Hormuz, a critical chokepoint for global oil and gas shipments. Brent crude futures climbed $2.39, or 3.14%, to settle at $78.40, while US West Texas Intermediate crude rose $2.17, or 3.04%, to $73.58 a barrel. Both benchmarks had seen gains exceeding 4% earlier in the trading session.

Analysts suggest that the market is pricing in a risk premium due to potential disruptions. "The focus will remain on the number of inbound tankers as a lower number could impact production, so currently we see a risk premium and a disruption risk supporting prices," noted UBS analyst Giovanni Staunovo. During peacetime, approximately 20% of the world's oil and gas passes through the Strait of Hormuz.

The Strait of Hormuz is a vital maritime corridor for global trade. Iran does not control it.

— CENTCOMUS Central Command stated its position on Iran's control over the Strait of Hormuz following military strikes.

US Central Command (CENTCOM) confirmed it conducted a series of precision strikes against dozens of targets within Iran. The military stated the operation aimed to degrade Tehran's capacity to launch attacks in the Strait of Hormuz. CENTCOM identified targets including Iranian air defense systems, coastal radar installations, missile and drone sites, and small boats. CENTCOM asserted, "The Strait of Hormuz is a vital maritime corridor for global trade. Iran does not control it."

Iran, however, maintains its assertion of full control over the Strait of Hormuz, considering the waterway Iranian sovereign territory. Tehran claims that foreign commercial and military vessels require explicit permission from the Islamic Revolutionary Guard Corps before transiting the area.

The focus will remain on the number of inbound tankers as a lower number could impact production, so currently we see a risk premium and a disruption risk supporting prices.

— Giovanni StaunovoUBS analyst Giovanni Staunovo commented on the factors supporting current oil prices.
DistantNews Editorial

Originally published by Jerusalem Post. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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