Brent crude jumps as US-Iran strikes choke Hormuz shipping
A collapsed US-Iran truce has triggered heavy military strikes and a near-halt to tanker traffic through the Strait of Hormuz, pushing European benchmark Brent crude sharply higher.
The United States and Iran have abandoned a month-old interim agreement aimed at reopening the Strait of Hormuz, instead launching their heaviest round of mutual strikes yet. US forces hit roughly 140 targets across Iran, deploying one-way attack sea drones for the first time to degrade Tehran’s ability to attack shipping. Iran retaliated by targeting US military facilities in Bahrain, Kuwait, Jordan, Oman, Qatar and the UAE.
The military escalation has effectively strangled commercial shipping through the world’s most critical oil chokepoint. Only six vessels transited the strait on Sunday, marking a five-week low according to ship-tracking firm Kpler compared to roughly 20 the previous day, while Iranian forces stopped at least two ships overnight by shutting down their systems. Most active tankers turned off their transponders, and no liquefied natural gas tankers were visible entering the waterway over the weekend.
Energy markets reacted immediately to the physical disruptions and the failure of diplomacy. Brent crude, the European benchmark, climbed 3.3 per cent in early trade to $78.50 a barrel, pulling back from a recent trough of $70.14. US crude rose 3.4 per cent to $73.83 a barrel. The price jump signals renewed fears of a global energy crisis, after crude previously spiked to wartime highs of $120 a barrel when Iran first tightened its grip on the passage.
The violence ends a brief diplomatic window, collapsing an interim deal signed last month amid disputes over control and US pressure on mediators like Oman. Iran declared the strait closed after vessels used an unapproved southern route hugging Oman's coastline, with Parliament speaker Mohammad Bagher Qalibaf writing: "The era of one-sided deals is OVER. We told you: keep your word or pay the price. Reality is knocking."
US President Donald Trump claimed Iran had broken an agreement. "They agreed to a deal yesterday - a perfect deal for us, no nuclear, no this, no that, no nothing, they gave up everything - and then after that, they left the room, and then within an hour they launched a drone at a ship," Trump told NBC’s Meet the Press. "We bombed the hell out of them last night. They are very, very evil and sick people," he added.
The few tankers that did exit the strait carried significant volumes. The Very Large Crude Carrier Humanity left with 2 million barrels of Iranian oil, while the Capetan Andreas carried about 500,000 barrels of Kuwaiti products. An Abu Dhabi National Oil Co tanker was also tracked exiting, heading for India, while three empty tankers entered the Gulf to load oil.
