Global energy markets were rattled this week as escalating tensions in the Middle East severely disrupted shipping through the Strait of Hormuz — a critical chokepoint responsible for around one-fifth of the world’s crude oil and LNG exports. Market indicators showed a sharp rise in Brent crude futures, which climbed above $85 per barrel, the highest level seen since mid-2024, as traders priced in potential prolonged supply constraints.
The disruption stems from attacks on vessels and threats to shipping following ongoing conflict involving U.S. and Israeli strikes on Iran and subsequent Iranian retaliatory actions. Maritime analytics reported that hundreds of tankers are stranded on either side of the strait as insurers withdraw war-risk coverage, compounding delays and forcing routings around longer alternatives such as Africa’s Cape of Good Hope.
Freight costs and insurance premiums have surged to record highs, with spot rates for very large crude carriers jumping sharply. Analysts warn that if the route remains closed, broad supply chain effects could push oil prices above $100 per barrel, intensifying inflationary pressures globally and weighing on economic growth.
…news as reported
