Oil Prices Surge 10% as Tanker Traffic Freezes Near Strait of Hormuz

Global oil markets are experiencing significant turbulence as energy traders respond to the escalating U.S.-Israel military campaign against Iran, with Brent crude prices surging approximately 10% to around $80 per barrel on Sunday — up sharply from Friday's seven-month closing high of $73 per barrel.

The spike follows a wave of precautionary shipping suspensions near the Strait of Hormuz, one of the world's most critical maritime chokepoints. Hundreds of oil tankers and liquefied natural gas carriers have dropped anchor or remained stationary near the strait, according to shipping data compiled by Reuters, after tanker owners, oil majors, and trading houses halted transits on Saturday.

"Our ships will stay put for several days," a senior executive at a major trading firm told Reuters, reflecting the cautious stance adopted across the industry.

Shipping conglomerate Maersk announced it is suspending all vessel crossings through the strait until further notice, while Greece's shipping ministry has advised vessels to avoid the Persian Gulf, the Gulf of Oman, and the Strait of Hormuz entirely. The Islamic Revolutionary Guard Corps (IRGC) has also reportedly warned that passage through the strait is not permitted, and at least two vessels have already been struck near the waterway, though the origin of the attacks remains unconfirmed.

Iran's Foreign Minister sought to ease concerns on Sunday, stating the country has "no intention of closing the Strait of Hormuz at present, nor has any plans to do anything that would disrupt navigation in it at this stage." However, market anxiety remains elevated given the strategic significance of the waterway, through which approximately one-fifth of the world's oil supply passes en route to global export markets.

Analysts warn that any Iranian move to formally close or mine the strait could push oil prices toward $100 per barrel. Iran itself produced 4.7 million barrels per day last year, representing 4.4% of global supply, with much of its heavily sanctioned output flowing to China through an informal shadow fleet.

In response to tightening supply concerns, OPEC+ agreed to increase production by 206,000 barrels per day in April, accelerating from its previous monthly increment of 137,000 barrels. However, analysts caution that spare production capacity across the cartel remains limited, with the bulk concentrated in Saudi Arabia.

The broader economic implications of sustained oil price increases are also drawing attention. William Jackson, Chief Emerging Markets Economist at Capital Economics, noted that a 5% annual rise in oil prices typically adds approximately 0.1 percentage point to inflation in major economies. Should Brent crude climb to $100 per barrel, global inflation could rise by an estimated 0.6 to 0.7 percentage points.

"This might slow the pace of monetary easing by major central banks, particularly in emerging markets, where policymakers tend to be more sensitive to swings in commodity prices," Jackson said in a research note published Saturday.

The situation remains fluid as military operations continue and diplomatic signals from Tehran are closely monitored by governments, energy markets, and global shipping operators alike.