Oil prices surge after attacks on tankers in Strait of Hormuz
Global oil prices surged sharply, jumping by 13% at the start of trading after Iran attacked at least three vessels in the Strait of Hormuz.
Details: According to the UK Maritime Trade Operations centre (UKMTO), two vessels were hit by direct missile strikes, while an unknown projectile exploded near a third ship.
Immediately after Asian markets opened, Brent crude rose above US$82 per barrel, although later the price spike eased somewhat.
Traffic through the strait – which handles about 20% of the world's oil and liquefied natural gas (LNG) transit – has effectively been halted.
Disruptions in the waterway could also have a very significant impact on prices for gas oil, jet fuel and naphtha. In 2025, around 9% of the world's daily gas oil supplies and about 18% of jet fuel shipments passed through the Strait of Hormuz.
More than 150 tankers have anchored in open waters in the Persian Gulf. Shipping company Maersk has announced the suspension of voyages through the region and is rerouting vessels around Africa via the Cape of Good Hope.
Citigroup bank has raised its short-term Brent forecast to US$85 per barrel. Bank analysts warn that if regional infrastructure is damaged, prices could reach US$120 per barrel.
Goldman Sachs estimated that the geopolitical risk premium in oil prices had risen to US$18 per barrel – equivalent to the impact of a complete six-week halt in tanker traffic.
Analysts at JPMorgan Chase warn that if the disruption lasts more than three weeks, oil producers in the Persian Gulf could run out of storage capacity and be forced to cut production.
Jorge León, Head of Geopolitical Analysis at Rystad Energy, told Bloomberg that they were considering a scenario in which disruptions in the Strait of Hormuz lasted longer than a few days, potentially for weeks or months, and that in such a case prices could reach US$100 per barrel.
On Sunday 1 March, the OPEC+ group agreed to increase output by 206,000 barrels per day in an attempt to curb possible price growth. However, some experts doubt the effectiveness of the move, as the additional volumes may be physically impossible to transport while the strait remains blocked.
Goldman Sachs analysts also warn that natural gas prices in Europe could more than double if shipping through the Strait of Hormuz is halted for at least one month.
Background:
- On 28 February, the US and Israel launched a large-scale military campaign against the Islamic Republic of Iran. During a targeted airstrike on the residence of Iran's Supreme Leader Ali Khamenei, 30 bombs were reportedly dropped, killing him along with key members of the country's leadership.
- In response, Tehran launched large-scale strikes using ballistic missiles and kamikaze drones against US bases and the territories of American allies in the Middle East, including Qatar, Bahrain, Kuwait and the United Arab Emirates.
- Iran also blocked the Strait of Hormuz in response to the military operation by the US and its allies.
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