Oil prices rise as Iran war threatens shipping through strait of Hormuz

Oil prices surged and stock markets declined on Monday following US-Israeli strikes on Iran, raising fears of global economic disruption. Brent crude oil jumped as much as 13%, reaching a 14-month high, due to concerns about the potential closure of the Strait of Hormuz, a critical route for global oil and gas shipments. Stock markets in Asia and pre-market trading in the US reacted negatively, while gold prices rose as investors sought safe-haven assets. Reports indicate Iran warned tankers against passing through the Strait of Hormuz after the strikes, and maritime agencies urged ships to avoid the area following attacks on vessels. Several shipping companies, including Maersk, have halted passage through the Strait of Hormuz and the Suez Canal due to safety concerns.

Oil prices rose after at least three ships were attacked near the Strait of Hormuz, a critical waterway for global oil and gas transport. The UK Maritime Trade Operations Centre reported the attacks, with Iran warning ships against passage. International shipping has slowed significantly at the strait's entrance, raising concerns about potential energy price increases. Brent crude oil prices initially jumped over 10% before settling around 4% higher. Analysts suggest that while the market isn't panicking, a prolonged conflict could push prices higher, despite OPEC+ agreeing to increase output. The disruption raises concerns about potential increases in petrol prices worldwide, with the UKMTO advising ships to transit the area with caution.

Following US-Israeli attacks on Iran in March 2026, Iran has retaliated, targeting assets across the Middle East. This escalation has raised concerns about the Strait of Hormuz, a critical waterway for global oil and gas shipments, with Iranian officials hinting at a potential closure. The Strait, located between Oman/UAE and Iran, is a narrow but vital passage connecting the Persian Gulf to the Arabian Sea. While Iran hasn't officially closed the Strait, reports of Iranian transmissions restricting passage have led some tanker owners to suspend shipments, and countries like Greece are advising vessels to avoid the area. Analysts warn that any disruption to this route, through which 20-30% of global oil and gas supplies pass, could cause a spike in global oil prices and destabilize the world economy.