LONDON
Oil prices surged by as much as 13 per cent on Monday after shipping in the crucial Strait of Hormuz was disrupted by retaliatory Iranian attacks following initial bombing by Israel and the United States that killed Iranian Supreme Leader Ayatollah Ali Khamenei.
Brent crude futures rose to as much as $82.37 a barrel, the highest since January 2025, before retreating to be up $5.41, or 7.4pc, to $78.28 by 06:05. US West Texas Intermediate crude climbed to an intraday high of $75.33, up over 12pc and the highest since June, though it later pared gains and was up $4.74, or 7.1pc, at $71.76. Both benchmarks jumped as a sustained exchange of counterattacks damaged tankers and sharply disrupted shipments in the Strait of Hormuz, a waterway between Iran and Oman that connects the Gulf to the Arabian Sea.
On a typical day, ships carrying oil equal to about one-fifth of global demand from Saudi Arabia, the UAE, Iraq, Iran, and Kuwait sail through the Strait along with tankers hauling diesel, jet fuel, and gasoline and other products from their refineries to major Asian markets, including China and India. “Markets are acknowledging the seriousness of the conflict, but are also signalling that, for now, this is a geopolitical shock, not a systemic crisis,” said Priyanka Sachdeva, senior analyst at Phillip Nova.
Prolonged effective closure of the Strait would push oil prices higher and cause shortages in supply to top importers, China and India. More than 200 vessels, including oil and liquefied gas tankers, have dropped anchor outside the Strait, shipping data showed on Sunday. Three tankers were damaged, and one seafarer was killed in attacks on Sunday in Gulf waters.
