Oil Prices Jump Over 3% Following Iran’s Closure of the Strait of Hormuz
Investing.com reported that Asian trade on Monday saw oil prices surge more than three percent after Iran announced the Strait of Hormuz was closed. The closure followed Iran’s expansion of missile and drone attacks on Gulf states, specifically Qatar and the United Arab Emirates, in retaliation for recent U.S. military strikes.
At 20:05 ET (00:05 GMT), Brent crude futures for September delivery were up 3.2 % to $78.46 per barrel, while West Texas Intermediate (WTI) futures rose 3.4 % to $73.83 per barrel. Both contracts had advanced more than four percent in the preceding week as the U.S.–Iran conflict reignited.
Iran justified the closure after a commercial vessel was hit, prompting concerns that one of the world’s most critical energy shipping lanes could be disrupted. The U.S. disputed Iran’s claim; President Donald Trump asserted that commercial shipping through the waterway remained open under U.S. protection, although actual shipping activity slowed sharply over the weekend.
The Strait of Hormuz is the primary export route for crude from Saudi Arabia, Iraq, Kuwait, the United Arab Emirates and other Gulf producers. A sustained disruption could force refiners—particularly in Asia—to seek alternative supplies, thereby increasing freight and insurance costs. Market participants are also monitoring potential coordinated responses from major oil producers and the possibility of releases from strategic petroleum reserves if supply pressures intensify.
The geopolitical risk premium has re‑entered the oil market after a period of easing, reflecting stalled diplomatic efforts to restore the previous U.S.–Iran understanding.