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Energy Markets · Geopolitics · Oil Prices · Strait Of Hormuz
Global oil prices surged over 10% initially, with Brent crude rising 4% to $76.16 and US-traded oil up 4% to $69.67, following attacks on at least three ships near the Strait of Hormuz amid ongoing regional conflict involving Iran, the US, and Israel.
The UK Maritime Trade Operations Centre (UKMTO) confirmed two vessels were struck and an "unknown projectile" exploded near a third. Iran warned ships against passing through the Strait, which transports approximately 20% of the world's oil and gas, causing international shipping to almost halt.
Despite the initial price jump, Saul Kavonic, head of energy research at MST Marquee, states the market is not panicking, noting that oil transport and production infrastructure has not been a primary target. He expects prices to subside if traffic through the Strait of Hormuz returns.
However, some analysts warn prices will exceed $100 in the event of a prolonged conflict. On Sunday, the Opec+ group agreed to increase output by 206,000 barrels a day to cushion price rises, though experts doubt its significant impact.
Edmund King, president of the AA, predicts the disruption will drive up global petrol prices, with the magnitude and duration dependent on the conflict's length.
