Oil prices have climbed above $100 a barrel because shipping through the Strait of Hormuz remains far below normal, while attacks on an Iranian vessel and Saudi Arabia’s East-West oil pipeline have added fresh risks to supply. Brent crude rose $3.21 to $107.82 a barrel, and US West Texas Intermediate gained $3.17 to $103.22.
The rise has continued despite US claims that traffic through the waterway is improving. The competing accounts, limited tanker movements and postponed diplomatic talks leave traders facing uncertainty over how much oil can move and for how long.
How much traffic is moving through Hormuz?
US Energy Secretary Chris Wright said the recent average of 10 million barrels per day represented about two-thirds or more of previous flows. President Donald Trump has also said the United States is escorting ships carrying millions of barrels of oil and is in “total control” of the strait.
Iran disputes those claims. Tehran says it controls access to Hormuz and has warned vessels against using routes it has not authorised. Iran also announced a restricted shipping zone around the waterway last week.
Preliminary tanker-tracking data reported by Reuters showed traffic falling to single digits a day over the weekend and remaining below a 10-day average of 14 vessels a day. The figures can change because some ships switch off their Automatic Identification System transponders and are not included in official counts.
Key figures
- US Energy Secretary Chris Wright said an average of 10 million barrels of oil per day moved through Hormuz over the past week.
- Tanker-tracking data showed 14 vessels transiting the waterway over the weekend: four leaving the Gulf and 10 entering it.
- Before the war, more than 100 vessels a day carried an estimated 20 million barrels of oil through the strait.
- War-risk insurance for some Hormuz transits has risen from about 0.25 percent to as high as 3–10 percent of a vessel’s hull value.
Why the Saudi pipeline matters
Saudi Arabia has been using its East-West pipeline to export oil through the Red Sea while passage through Hormuz is restricted. A drone attack originating from Iraq temporarily shut the pipeline, according to Saudi officials.
If the pipeline remains closed, 4 percent of global oil supply will be threatened. Further missile and drone attacks by Yemen’s Houthi group on southern Saudi Arabia have increased uncertainty around exports from the world’s largest oil producer.
A vessel was also struck by an unknown projectile while transiting Hormuz, according to the United Kingdom Maritime Trade Operations centre. Iran’s Islamic Revolutionary Guard Corps separately said it intercepted and destroyed an MQ-1 drone over the strait. Read the context: Brent crude climbs as Strait of Hormuz deal remains uncertain.
What could keep prices under pressure?
Chris Beauchamp, chief market analyst at IG Group, said oil prices were likely to remain under upward pressure while disruption in Hormuz continued. He said near-month futures were trading at a premium to the spot price, indicating that traders expected disruption to persist.
The Bab al-Mandeb strait is another concern. Abdul Khalique, head of the Liverpool John Moores University Maritime Centre, said the Houthi group’s presence along Yemen’s western coast had added to the rise in oil prices. He said higher war-risk insurance was also increasing the cost of moving tankers.
A meeting in Oman between Gulf countries and Iran on possible agreements for the Strait of Hormuz was postponed. Iran said Saudi Arabia delayed the meeting after the recent events in Yemen, while Wright said a consensual agreement with Iran was not a reliable expectation at that point. Related coverage: Brent crude approaches $97 as Strait of Hormuz traffic falls.
What happens next
The postponed Oman meeting was the next stated diplomatic avenue for discussing possible agreements on the Strait of Hormuz, but no new meeting date was provided.
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