Oil Prices Surge Up to 13% as Strait of Hormuz Shipments Disrupted

Oil prices experienced a sharp increase on Monday, climbing by as much as 13 percent, following significant disruptions to shipping in the Strait of Hormuz. The surge occurred after retaliatory Iranian attacks, which came in response to earlier bombings by Israel and the United States that resulted in the death of Iranian Supreme Leader Ayatollah Ali Khamenei.

Brent crude futures reached a peak of $82.37 per barrel, marking the highest level since January 2025. However, prices later eased, with Brent crude up $5.41, or 7.4 percent, at $78.28 by 06:05. Similarly, US West Texas Intermediate (WTI) crude rose to an intraday high of $75.33, an increase of over 12 percent and the highest since June. WTI later pared gains but remained up $4.74, or 7.1 percent, at $71.76.

Both benchmarks saw significant jumps as a result of sustained counterattacks that damaged oil tankers and caused sharp disruptions to shipments passing through the Strait of Hormuz. This waterway, located between Iran and Oman, serves as a critical passage connecting the Gulf to the Arabian Sea.

On a typical day, the Strait of Hormuz sees the transit of ships carrying oil that accounts for roughly one-fifth of global demand. These shipments originate from key producers such as Saudi Arabia, the United Arab Emirates, Iraq, Iran, and Kuwait. In addition to crude oil, tankers transporting diesel and other petroleum products also pass through this strategic route.

The recent escalation and resulting damage to tankers have raised concerns among market participants about the stability of global oil supplies. The situation remains fluid as further developments in the region are closely monitored by industry stakeholders.