A new surge has been recorded in oil prices in recent hours, driven by mounting uncertainty over conditions in the Strait of Hormuz. More specifically, oil prices shot up more than 4% on Monday (July 13), as energy shipments through the Strait of Hormuz remained under threat, with the United States and Iran both announcing new military strikes.
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Brent crude futures rose by $3.10, or 4.08%, to $79.11 as of 03:25 GMT, while US West Texas Intermediate (WTI) crude climbed $2.95, or 4.11%, to $74.36 per barrel.
Oil prices rise on Strait of Hormuz crisis
US forces completed another wave of strikes against Iran on Sunday, hitting dozens of targets across multiple locations with precision munitions, US Central Command announced. Iran’s Revolutionary Guards stated on Monday that they had launched attacks on American military bases in Kuwait and Bahrain.
What Trump said
US President Donald Trump declared on Sunday (July 12) that the Strait of Hormuz is open to commercial traffic, even as Iran had earlier claimed it closed the strait after a vessel traveled an unauthorized route and was struck. Approximately 20% of the world’s oil and liquefied natural gas passed through the strait before the war began in late February.
Minimal transits through the Strait of Hormuz on Sunday
Just six vessels crossed the strait on Sunday, according to ship-tracking data from Kpler — the lowest number in five weeks. The escalating strikes are raising concerns about the fate of an interim US-Iran agreement signed last month, which aimed to reopen the strait and end the war following another 60 days of negotiations.
Developments following the agreement
Since the agreement, global oil supply increased by 4.1 million barrels per day in June, but remained 9.4 million barrels per day below pre-war levels, the International Energy Agency reported in its monthly report on Friday. “Hopes for a relatively swift resolution to recent conflicts may be called into question following the weekend’s escalation,” ANZ analysts wrote in a note.
IG market analyst Tony Sycamore said the relatively modest rise in oil prices suggests the market is adopting the view that the current flare-up represents an escalation within a fragile ceasefire, rather than a full-blown breakdown of the truce. “How accurate that view is remains to be seen,” he noted.
