Oil Prices Rise as Hormuz Strait Shipping Slows Again

Global oil prices rose and commercial shipping traffic through the Strait of Hormuz slowed again after the latest exchange of attacks between the United States and Iran heightened security risks along the world’s key energy distribution route.

On Sunday, Brent crude rose about 3.5 percent to nearly 79 US dollars per barrel, approximately nine percent above the level before the conflict. Kpler recorded only 22 ships transiting the strait on Thursday. Before the conflict erupted, more than 130 ships crossed the Strait of Hormuz daily, according to the maritime data firm.

The escalation followed a US strike on around 140 targets in Iran after Tehran attacked a container ship in the Strait of Hormuz. Iran stated it retaliated by striking American positions in the region.

Kpler’s head of Middle East research, Amena Bakr, said the latest attacks had destroyed commercial shipping companies’ confidence, The New York Times reported. “Confidence is eroding very, very quickly. We are back to square one in this situation,” Bakr said.

The International Energy Agency (IEA), in a report on Friday, stated that the recovery of Gulf oil exports following the initial US-Iran ceasefire last month had boosted global supply. However, the IEA warned that a broader recovery remains dependent on a swift de-escalation of the conflict.

Bakr noted that energy markets are becoming accustomed to recurring tensions in the region. “The market has adjusted to a new normal. Price movements are not yet fully reflecting the actual conditions or the level of geopolitical risk,” she said.