Crude
Rises to $80 as Hostilities Return in Hormuz
The renewed hostilities posed fresh
risks to ships seeking to navigate the Strait of Hormuz.
·
Brent crude oil rose 3.4% on Monday to nearly US$79 per
barrel, about 8% above its pre-war level, reflecting renewed
geopolitical tensions.
·
Shipping through the Strait of Hormuz has fallen
sharply, with only 14 vessels transiting on Sunday compared with more
than 130 ships daily before the conflict.
·
The Strait of Hormuz normally carries about 20%
of the world's oil trade, making disruptions a major concern for global
energy markets.
·
The latest escalation followed U.S. strikes on
around 140 targets in Iran after Tehran attacked a container ship in the
Strait. Iran responded by targeting U.S. military installations in Bahrain,
Jordan and Kuwait.
·
According to maritime intelligence firm Kpler, the confidence commercial shipping had
regained after last month's ceasefire has rapidly disappeared, raising fresh
concerns over maritime safety.
·
Although oil prices remain well below the wartime
peak of nearly US$120 per barrel, the conflict continues to demonstrate
Iran's ability to influence global energy prices.
·
The International Energy Agency (IEA) had
earlier reported that the temporary ceasefire enabled Persian Gulf oil exports
to recover to around 16 million barrels per day in June, an increase of 6.5
million barrels per day, though exports remained only about two-thirds
of pre-war levels.
·
The IEA cautioned that any sustained recovery in
oil exports depends on a swift de-escalation of renewed hostilities.
·
Economists warn that prolonged disruptions could
shift concerns from an expected oil surplus to demand destruction, as
persistently high fuel prices weaken consumer spending and business activity.
·
In the United States, average fuel prices remain
elevated:
o
Gasoline: US$3.87 per gallon, about 30% above
pre-war levels.
o
Diesel: US$4.88 per gallon, up from US$4.76
a week earlier.
·
Financial markets reacted cautiously:
o
S&P 500 futures declined about 0.3%.
o
Equity markets across Asia and Europe also
traded lower.
o
The yield on the U.S. 10-year Treasury rose
to around 4.57%, reflecting concerns about energy-driven inflation.
·
Market analysts believe oil traders have become
increasingly accustomed to periodic U.S.-Iran confrontations, with prices now
responding more strongly to prospects for peace negotiations than to fresh
military strikes.
·
Iran continues to insist that commercial vessels
should use shipping lanes through Iranian waters, while ships using
routes closer to Oman's coastline under U.S. naval protection have
become targets of Iranian attacks.
·
The central shipping channel of the Strait remains
largely avoided because of concerns that Iranian naval mines pose a
significant threat to maritime traffic.
[ABS News Service/13.07.2026]
The
continued cycle of attacks between Iran and the United States in the Persian Gulf
posed fresh risks to ships seeking to navigate the Strait of Hormuz, testing markets
on Sunday.
Brent
crude, the international oil benchmark, rose 3.4 percent on Monday, to nearly $79
a barrel. That is 8 percent higher than its prewar price.
Daily
ship traffic through the strait, which normally carries a fifth of the world’s oil,
recently dropped to the lowest level in a month, with the latest data showing only
14 ships braving the passage on Sunday, according to Kpler, a maritime data firm.
More than 130 vessels passed through daily before the war.
In
the latest round of attacks, the U.S. military said it had hit about 140 targets
in Iran over the weekend after Tehran attacked a container ship in the strait. Iran’s
military said on Monday it had responded by firing at U.S. military targets in the
region, including in Bahrain, Jordan and Kuwait.
Amena
Bakr, head of Middle East research at Kpler, said any
assurance that commercial vessels had gained with the ability to pass through the
Strait of Hormuz over the past few weeks was gone.
“That
confidence eroded very, very quickly,” Ms. Bakr said. “We’re back to square one
when it comes to that situation.”
Although
oil prices are far below the peak of nearly $120 a barrel during the worst of the
war, the market shifts that follow each round of strikes have shown Iran’s capacity
to move energy prices.
A
recovery in shipping traffic after the United States and Iran signed a preliminary
cease-fire agreement last month had led to a “sharp” increase in global oil supplies,
the International Energy Agency said in a report released on Friday. Oil exports
from the Persian Gulf jumped by 6.5 million barrels per day in June, to around 16
million barrels per day, helping to bring down prices.
Still,
last month’s export pace was only about two-thirds of prewar levels. A more comprehensive
recovery is “contingent on a swift de-escalation of renewed hostilities,” the I.E.A.
said.
If
ships become more wary of plying the strait after recent attacks, the talk among
economists may turn from forecasts of an impending oil glut to worries about “demand
destruction” as high energy prices squeeze businesses and consumers. The average
price of a gallon of gasoline in the United States remains 30 percent higher than
before the war. It was $3.87 a gallon on Monday, up from $3.80 a gallon a week earlier,
according to the AAA motor club. Diesel was $4.88 a gallon, up from $4.76 a gallon.
Futures
for the S&P 500 fell about 0.3 percent on Monday, signaling
that U.S. stock markets were set to open lower at the start of trading in New York.
Stocks in Asia, where countries import vast quantities of oil and gas from the Middle
East, fell broadly. Stocks in Europe were also lower.
Worries
about energy-induced inflation have pushed up yields on U.S. government bonds, with
the yield on the 10-year Treasury hovering around 4.57 percent on Monday, about
a tenth of a percent higher than a week ago — a big move in a short time for that
market.
Ms.
Bakr of Kpler said that oil markets appeared to have grown
accustomed to volatility and on-again, off-again hostilities between the United
States and Iran. She said oil prices were more likely to fall at any hint of renewed
negotiations toward peace than they were to surge with new strikes.
“The
market has adjusted to this new normal,” Ms. Bakr said, adding, “The movement of
prices hasn’t really reflected the reality of the situation or the level of geopolitical
risk.”
Iran
insists that its waters are the only viable route through the Strait of Hormuz for
commercial vessels. Ships instead taking a route close to Oman’s coastline, guided
and protected by the U.S. military, have drawn Tehran’s wrath. The vessel attacked
this weekend was in Omani waters, as were the ships hit last week, setting off the
latest cycle of tit-for-tat retaliation.
The
middle of the strait, where ships traveled before the
war, is considered dangerous because of the risk of mines laid by Iran’s military.