- Following the US seizure of an Iranian cargo ship, the Strait of Hormuz saw only three tankers cross in 12 hours, leaving 10-11 million barrels per day of crude oil shut in.
- Brent crude jumped by 4.8% to $94.75/bbl and WTI 5.7% to $88.61/bbl as traders feared a broader conflict.
- The shutdown led to long queues of tankers; one Malta‑flagged ship, the Odessa, went dark and reappeared near Fujairah en route to South Korea, highlighting opacity in cargo movements.
Global oil markets were rocked after US forces detained an Iranian ship and Tehran responded by tightening its grip on the world’s busiest oil chokepoint.
With just three tankers passing through the Strait of Hormuz in a 12‑hour period, analysts estimate that 10–11 million barrels per day of crude – roughly a tenth of global supply – remains shut in. The result has been a sharp spike in prices: Brent crude surged by almost 5% to $94.75 per barrel, while US benchmark WTI jumped by 5.7% to $88.61.
The Strait of Hormuz, a narrow waterway between Iran and Oman, usually sees around 20% of the world’s oil and liquefied natural gas (LNG) pass through daily. It has effectively become a maritime chokepoint since Iran’s Revolutionary Guard began harassing commercial vessels following the US-Israeli offensive.
Lloyd’s List Intelligence data shows that ships now travel in convoys under military escort. Reuters reported that shipping through the strait remained “largely stalled”, with only a handful of tankers successfully navigating the route.
Oil traders fear a worst‑case scenario in which Iran retaliates by blocking the passage completely or targeting tankers with drones. Such a move could push prices above $100 per barrel and trigger fuel rationing in Europe.
The strait’s closure would also hit LNG shipments from Qatar, a major supplier to the UK. The Odessa, a Malta‑flagged tanker bound for South Korea, illustrated the chaos: after passing through Hormuz on 13 April, it disappeared from tracking systems, only to reappear days later near Fujairah.
Operators have been turning off AIS transponders to avoid detection, raising risks of collisions and spills.
Beyond immediate price effects, the disruption is shaking investor confidence in energy‑exporting regions. Insurance premiums for Gulf transits have skyrocketed, and some traders are diverting cargoes around the Cape of Good Hope despite the longer journey.
Analysts at Goldman Sachs warn that if 10 million barrels a day stay offline for weeks, the global economy could tip into recession. The International Monetary Fund has lowered its growth forecast for Europe, citing energy supply risks.
Surging fuel costs will feed inflation and erode household spending. The UK government is expected to draw on strategic petroleum reserves and may fast‑track measures to boost domestic renewables. Ed Miliband’s push to decouple electricity prices from gas (see story xxx) takes on new urgency in this context.
Policy experts say the crisis also presents an opportunity to accelerate the energy transition. After Russia’s invasion of Ukraine in 2022, European countries rapidly expanded solar and wind capacity to cut reliance on Russian gas; a similar response could follow the Iran conflict.
Fatih Birol of the IEA has argued that higher oil prices will make renewables more competitive and catalyse investment. Still, bridging the gap between ambition and deployment will require overcoming permitting delays and supply‑chain constraints.
