US-Iran Gulf escalation cuts Strait of Hormuz crude transit to two-month lows, Brent rises
Crude flows through the Strait of Hormuz have fallen to two-month lows after the US-Iran truce collapsed and Washington reimposed its naval blockade. Brent climbed about 2% on Friday to near $86 a barrel, with only a handful of tankers transiting the strait midweek. Per Reuters a
The collapse of last month's US-Iran truce is now showing up at the world's most important oil chokepoint. After US forces reimposed a naval blockade on Iranian ports this week and both sides intensified strikes across the Gulf, crude traffic through the Strait of Hormuz has fallen to two-month lows. Reuters reports that only seven vessels transited the waterway on Wednesday, the first full day under the renewed blockade, down from 13 the previous day. Brent crude rose roughly 2% on Friday to around $86 a barrel, heading for a steep weekly gain, as traders priced in the risk of a prolonged disruption. About a fifth of the world's seaborne oil normally passes through Hormuz, which means the effect of any sustained blockade is not confined to the Gulf. Higher crude prices ripple into diesel, jet fuel, and shipping rates, and the countries most exposed are large importers in Asia that depend on Gulf barrels. What makes this moment different from earlier flare-ups is that the disruption is being driven by a formal blockade rather than a one-off attack, which gives it a longer potential shelf life. Whether prices hold depends less on any single strike than on how long the strait stays effectively closed. Per Reuters and Bloomberg.