crude oil
The Strait of Hormuz is a critical maritime route for movement of vessels, with about 20 per cent of world’s oil and gas supplies passing through it daily.
Brent crude, the international benchmark, jumped 9 per cent from $78.38 on Monday, July 13 to settle at $85.45 per barrel on Wednesday, July 15, while West Texas Intermediate (WTI) crude climbed to $80.06 per barrel.
The price spike was triggered by the White House’s confirmation that it has reimposed a naval blockade on Iranian ports and conducted fresh airstrikes to degrade military capabilities.
Tehran responded defiantly, with a senior military commander warning that the Strait of Hormuz could be closed if its territory or interests are threatened.
The U.S. and Iran resumed hostilities last week, following the collapse of the ceasefire agreement reached in June after several months of fighting.
The sudden price surge was set off by a rapid succession of military and political maneuvers over the last few days.
The U.S. President Donald Trump on Friday announced the reinstatement of a naval blockade on all Iranian ports and coastal areas, aiming to entirely choke off Tehran’s oil exports. This effectively nullifies the brief window of high-volume exports Iran maintained during a temporary diplomatic pause.
Following the attacks on commercial shipping, including a strike on Emirati tankers, and retaliatory U.S. airstrikes, commercial vessel traffic through the Strait of Hormuz has slowed to a near-standstill as shipping firms steer clear of the volatile waters.
Iran-backed forces have launched retaliatory drone and missile strikes targeting U.S. military assets in Jordan and Bahrain, signaling that the conflict could widen further across the Persian Gulf.
The geography of the Persian Gulf makes the region the most critical choke point in the global oil supply chain.
Traders are also eyeing potential Iranian retaliation against shipping in the Red Sea or against U.S. allies in the region.
A Reuters report quoted analysts saying Iran has been threatening to use its Houthi allies in Yemen to shut the Bab el-Mandeb gateway to the Red Sea, opening a new front against Washington and putting two of the world’s most vital energy arteries at risk.
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The surge is already rippling through global markets. Asian and European bourses saw energy stocks rally, while airline and logistics shares tumbled on fears of higher fuel costs. At the pump, U.S. gasoline prices are expected to follow, potentially reigniting inflation concerns ahead of the Federal Reserve’s next rate decision.
Analysts warn that the U.S. naval blockade of ships coming/going to Iranian ports is tightening the oil market.
Goldman Sachs estimated that the U.S.-Iran agreement in June led to recovery of Gulf exports by over 80 per cent of the pre-war levels but slipped back below 50 per cent , or about 11 million bpd, over the last week as hostilities resumed.
The firm projected that Brent could exceed $110 in the fourth quarter this year if Gulf export recovery continues to stall.
For now, consumers and policymakers alike are bracing for what could be the most volatile oil summer since the 2022 price shocks, with all eyes fixed on the Gulf’s churning waters.
In Nigeria, the rising crude oil prices could cause a reverse pump prices of petroleum products that is still cooling off from the shocks of the last four months when prices went to as high as ₦1,500 per litre for petrol as oil peaked at about $120 per barrel in the international market.
Victor Ezeja is a Nigerian journalist skilled in producing insightful news analyses, feature stories, and interviews that simplify complex issues and drive informed public discourse. His work combines rigorous research, balanced reporting, and compelling storytelling to highlight developments shaping industries and society. Victor, who holds a Master's Degree in Mass Communication, specializes in energy, aviation, business, and economic reporting. He can be reached via @VICTOREZEJA on X