Brent tops $90 as Hormuz tensions fuel oil market fears

Highlights

Brent exceeded $90 early Monday before easing to $88.41.
WTI traded at $81.68 after giving up earlier gains.
Iran threatened to stop energy shipments through Hormuz.
The Hormuz Strait carries about 20% of global oil traffic.

Brent was later trading at $88.41 a barrel, up 0.16%, according to the latest market data. U.S. West Texas Intermediate stood at $81.68, down 0.12%. The moves followed a ninth consecutive night of U.S. strikes on Iranian targets, according to CNBC.

Hormuz threat lifts supply risk

Iran’s Revolutionary Guard said it controlled the Strait of Hormuz. It warned that not a single drop of oil, gas, or chemical fertilizer would pass through the waterway while U.S. military action continued.

The strait normally handles about 20% of global oil traffic. Any extended disruption could remove large volumes from the market and raise shipping, insurance, and fuel costs.

Traffic has already fallen sharply during the latest escalation. Traders are watching vessel movements for signs that the slowdown could turn into a broader interruption of Gulf exports.

U.S. Central Command said its latest strikes targeted capabilities used against commercial vessels. The campaign has included attacks on Iranian coastal surveillance systems, air defenses, maritime assets, and storage sites for missiles and drones.

The military action followed new U.S. casualties in the region. American officials confirmed that another service member had been killed. Unidentified remains were also recovered near the site of an earlier Iranian attack in Jordan.

Market remains below crisis levels

Brent’s move above $90 showed that traders are adding a larger geopolitical premium to oil prices. However, the retreat to $88.41 suggests the market is not yet pricing in a prolonged closure of Hormuz.

Amrita Sen, founder and research director at Energy Aspects, said a major shipping slowdown could push oil above $100 a barrel. Low global inventories and short positions held by some traders could intensify the move.

Market pricing still reflects uncertainty over how long the conflict will last. It also leaves room for a sharp rally if tanker traffic declines further or energy infrastructure is damaged.

Inflation risk returns

The Strait of Hormuz links major Gulf producers with global buyers. A sustained blockage could push crude into triple digits and raise costs for transport, manufacturing, and food production.

Brent’s early rise above $90 is already a warning for consumers and central banks. Higher energy prices could revive inflation pressure and complicate plans to reduce interest rates.

As we previously reported, Hormuz shipping slows as U.S. Iran conflict widens.

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