Washington and Tehran are back at each other, while traffic in Hormuz collapses to just six transits in one day. Brent returns above $78, erasing weeks of price normalization.
Tensions rise dangerously again in Hormuz. This afternoon, American President Donald Trump announced via social media the restoration of the «Iranian blockade, so called because it only prevents Iranian ships or customers from entering or exiting. All other countries will be able to use the Strait in a fair and free manner.”
“The United States will henceforth be known as the ‘guardian of the Strait of Hormuz,’ but as such, and as a matter of fairness, it will receive a 20% refund on all goods shipped,” continued the tycoon.
The struggle for traffic control in Hormuz
Already between Saturday and Sunday the conflict had escalated further. US forces conducted what Central Command (CENTCOM) called the third wave of attacks of the week, hitting Iranian military targets near all major cities on the country’s southern coast, including missile and drone sites, naval capabilities, ammunition depots, communications networks and coastal surveillance posts.
The raid was triggered after, according to Washington, the Guardians of the Revolution struck a Cypriot-flagged container ship transiting the strait, with one crew member still missing.
Tehran instead spoke of a warning shot against a vessel attempting to follow an unauthorized route, declaring a new formal closure of the Strait of Hormuz.
This morning’s Iranian retaliation hit US and allied bases across the Gulf region, with the Pasdaran claiming an attack on Prince Hassan air base in Jordan, as well as attacks on US bases in Bahrain and Kuwait.
This escalation has had disruptive effects on maritime traffic, so much so that according to ship-tracking data from Kpler, only six vessels passed through the strait on Sunday, the lowest number in the last five weeks, and most of the oil tankers turned off their transponders during the crossing.
The reaction of the energy markets
After weeks of relative normalization between the end of June and the beginning of July, when prices had fallen to reach levels prior to the outbreak of the conflict, the end of the truce has put oil markets back under pressure.
Brent rose towards $79 a barrel after a 5.4% gain in the last week, while WTI is trading around $74. Also fueling the rise is uncertainty about the state of the strait, with Iran claiming to have closed it until further notice, while CENTCOM claims it is open.
Also regarding supplies, the agreement reached in June between Washington and Tehran had allowed a partial recovery of supplies from the Gulf. Production disruptions in the Middle East had fallen to an average of 8.3 million barrels a day in June, after peaking at 11.2 million in May, according to data from the US Energy Information Administration.
Of course, this is still an improvement that is still far from pre-conflict levels, but the trend seemed to be positive, until a few days ago.
Among the countries that responded best were the United Arab Emirates, with their exports growing by almost 30% thanks to the Habshan-Fujairah oil pipeline, which allows it to bypass the Strait of Hormuz.
In short, the new round of escalation risks bringing energy prices back up and limiting the export of hydrocarbons from the Gulf countries for weeks to come.
