Oil Prices Jump 3% After Iran Declares Strait of Hormuz Closed
On Monday, Asian trade saw oil prices surge more than 3% following Iran's announcement that the Strait of Hormuz was closed. At 20:05 ET (00:05 GMT), Brent crude futures for September delivery rose 3.2% to $78.46 per barrel, while West Texas Intermediate (WTI) futures increased 3.4% to $73.83 per barrel. Both contracts had advanced over 4% in the preceding week as the U.S.–Iran conflict reignited.
Iran expanded missile and drone attacks on Sunday to the Gulf states of Qatar and the United Arab Emirates, stating the actions were retaliation for recent U.S. military strikes. Tehran also declared the Strait of Hormuz closed after a commercial vessel was hit, heightening concerns over one of the world’s most critical energy shipping lanes.
The United States disputed Iran’s claim; President Donald Trump asserted that commercial shipping through the waterway remained open under U.S. protection. Nevertheless, shipping activity slowed sharply over the weekend, raising worries that a prolonged disruption could tighten global oil supplies.
The Strait of Hormuz is the primary export route for crude from Saudi Arabia, Iraq, Kuwait, the United Arab Emirates and other Gulf producers. Any sustained interruption could force refiners—particularly in Asia—to seek alternative supplies, push freight and insurance costs higher, and prompt coordinated responses from major oil producers or releases from strategic petroleum reserves.
Market participants noted that the geopolitical risk premium has returned to the oil market after a recent easing, as diplomatic efforts to restore the prior U.S.–Iran understanding appear stalled.