Oil markets have seen their sharpest price increase in nearly two months after attacks on fossil fuel tankers near the Hormuz Strait prompted Donald Trump to state the ceasefire agreement with Iran was “over”.
Brent crude, the global benchmark, climbed 5% on Wednesday, surpassing $78 (£58) per barrel—the highest level since the recent U.S.-Iran ceasefire negotiations.
The ceasefire collapsed following Iran’s series of tanker attacks within 48 hours in the Hormuz Strait, including an LNG carrier carrying approximately 8 million cubic feet of cargo at high explosion risk.
At least four oil and gas tankers have reversed course in the strait, per ship-tracking data, severely limiting oil and gas flows through this critical route after months of disruption.
Rystad Energy’s Jorge León noted: “Tanker traffic through Hormuz has effectively halted, revealing current risk perceptions rather than official statements from Washington or Tehran.”
Global oil prices had dropped from over $110 per barrel in late May as more tankers resumed transit amid optimism about U.S.-Iran talks ending the conflict that disrupted ~20 million barrels daily from Gulf producers.
Europe saw gas prices rise 5% after the ceasefire breakdown. The Dutch contract increased €2.40 to €49/MWh, while UK prices rose 6p to 116.75p/therm.
Persistent energy price increases could heighten winter heating costs and pump prices after last summer’s record bills.
AA’s Luke Bosdet stated: “This looms large for UK drivers before summer. While wholesale prices have fallen, pump prices have dropped faster than expected due to recent wholesale declines.”
Analysts caution against $100+ Brent forecasts, citing market resilience despite disruptions.
PVM’s Tamas Varga explained: “Markets have proven adaptable. The $56 Brent drop in May-June must factor into revised price forecasts.”
Initially predicting a 20 million barrel/day supply loss from Hormuz, Gulf producers utilized alternative routes and covert crossings, reducing net losses to 12.2 million barrels/day.
Additional supply came from unaffected producers (9.1 million barrels), emergency crude releases, and sanctions waivers for Russian/Iranian oil in storage.
Varga concluded: “Effective supply loss was only 3.1 million barrels/day.”
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