Global oil prices soared on Monday after attacks on ships near the Strait of Hormuz heightened fears of a prolonged closure of the chokepoint that carries roughly a fifth of global seaborne oil.
Brent crude rose 4.5 per cent to $76.07 (£60) a barrel in early trade, after briefly topping $82 (£65), while US crude climbed 3.9 per cent. Airline shares across Asia also fell sharply and investors moved into the dollar and gold as fighting between the United States, Israel and Iran intensified.
The spike followed claims by Iran’s Islamic Revolutionary Guard Corp (IRGC) they had struck three US and UK oil tankers in the Gulf and the Strait of Hormuz, alongside missile and drone attacks on military bases and civilian infrastructure across the region. Shipping data showed hundreds of vessels, including oil and gas tankers, dropping anchor in nearby waters as traders braced for further disruption.
An official from the European Union’s naval mission Aspides told Reuters that vessels had received VHF radio transmissions from Iran’s Revolutionary Guards stating that “no ship is allowed to pass the Strait of Hormuz”.
Iran has not formally confirmed any such order. Tehran has for years threatened to block the narrow waterway in retaliation for attacks, but has stopped short of declaring a closure.
Marine tracking data suggests traffic has slowed significantly, with shipowners and insurers reassessing the risks of transit. The waterway, which runs between Iran and Oman, carries about 20 million barrels of oil a day – roughly one-fifth of global seaborne crude – as well as around 20 per cent of global liquefied natural gas, much of it from Qatar.
“The most immediate and tangible development affecting oil markets is the effective halt of traffic through the Strait of Hormuz, preventing 15 million barrels per day of crude oil from reaching markets,” Jorge Leon, head of geopolitical analysis at Rystad Energy, told Reuters.
“Unless de-escalation signals emerge swiftly, we expect a significant upward repricing of oil.”
Analysts warn that a sustained halt would have far-reaching consequences.
Goldman Sachs said European natural gas prices could more than double if shipping through the Strait of Hormuz were halted for a month. In a note, analysts said a month-long disruption could send European gas prices and Asian spot LNG up by 130 per cent to around $25 (£20) per million British thermal units. A longer disruption of more than two months could push European prices above €100 (£85) per megawatt hour, potentially triggering significant demand destruction.
Vaibhav Chaturvedi, senior fellow at the Council on Energy, Environment and Water, said: “The US-Iran war doesn’t bode well for the global energy economy. In the short run, we can expect an increase in oil prices. In the medium term, if the war drags, there would be a negative impact on the global economy.”
Alan Gelder, senior vice president of refining, chemicals and oil markets at Wood Mackenzie, told Reuters the nearest historical parallel was the Middle East oil embargo of the 1970s, when prices surged 300 per cent.
“That is only US$90/bbl in 2026 terms. Eclipsing this in today’s market concerned about significant losses of supply seems very achievable.”
John Gong, a professor at the University of International Business and Economics in Beijing, told RT News that closing the strait would have a “huge impact on the oil price as well as the global economy”. He described the idea of totally shutting the passage as “totally unacceptable”, warning it would carry high costs for countries such as China, Japan and South Korea that rely heavily on Middle Eastern oil.
China is a major buyer of Iranian crude, purchasing an estimated 1 to 1.5 million barrels per day that might otherwise struggle under sanctions. Traders in India, Japan and elsewhere are also bracing for higher prices.
Vivek Y Kelkar, a researcher focusing on geo-economics and sustainability, said that if those volumes were removed because of tighter enforcement or conflict damage, “the effects would extend far beyond China”.
“With nearly 90 per cent import dependence, every $10 (£8) per barrel rise increases the annual import bill by about $13–14bn (£10–11bn),” he said, referring to India’s exposure. “The likely outcome is not deep scarcity, but tighter global balances, higher prices and diminished negotiating leverage.”
OPEC+ countries agreed at the weekend to boost output by 206,000 barrels per day from April in an effort to cushion price rises. However, much of that additional supply would still need to pass through the Gulf, limiting its immediate effectiveness if shipping remains disrupted.
The economic strain of the war is already visible in the Gulf. The United Arab Emirates ordered its stock markets closed on Monday and Tuesday after Iranian strikes hit airports, ports and residential areas. Saudi Arabia’s benchmark index fell more than 4 per cent at the open on Sunday, Oman dropped 3 per cent and Kuwait suspended trading.
Analysts said they are focused on duration. If naval forces secure shipping lanes and traffic resumes, prices could ease. But if hostilities widen or insurers withdraw cover for vessels transiting the Gulf, energy markets may face renewed volatility, with consequences that extend well beyond the Middle East.
