Brent crude is closing in on the $100 per barrel mark after United States forces struck three Iranian oil tankers, escalating the conflict with Tehran and heightening concerns over crude supply and shipping through the Strait of Hormuz.
As at the time of writing, 07:00 am (WAT), Brent crude was trading at $97.53 per barrel, up 1.30 per cent, while West Texas Intermediate (WTI) stood at $92.65, gaining 1.28 per cent.
The latest rally followed U.S. strikes on three Iranian crude carriers M/T Downy, M/T Stark 1 and M/T Kylo near Kharg Island, Jask and the Gulf of Oman. The attacks came after Iran’s Islamic Revolutionary Guard Corps targeted two U.S. warships with ballistic missiles.
U.S. Central Command said the strikes were in response to the attacks on its warships, with Admiral Brad Cooper warning that Washington would impose a higher economic cost on Iran. The action has added another layer of risk to an already fragile oil market, particularly as the security of commercial shipping in the region remains uncertain.
Iran has threatened a stronger response. Parliament speaker Mohammad Bagher Qalibaf said the era of “proportionate responses” was over, warning that future retaliation would be “faster, heavier and more painful”.
The escalation also comes amid an ongoing U.S. naval blockade of Iran. Centcom said its forces had redirected 92 commercial vessels, disabled three and boarded two since the blockade resumed on July 14.
Meanwhile, the actual volume of crude moving through the Strait of Hormuz remains heavily disputed. U.S. Energy Secretary Chris Wright said more than 9 million barrels per day of oil was still being exported through water routes, with another four to five million barrels per day moving through pipelines.
Iranian authorities maintain that the Strait is completely closed to vessel traffic, while independent tanker-tracking data suggests that some crude continues to move through the strategic waterway. TankerTrackers.com estimated average flows at about 5.04 million barrels per day over the latest 28-day period, although the figure remains subject to uncertainty as more vessels turn off their AIS transponders.
The widening conflict is therefore keeping a substantial geopolitical risk premium in crude prices, with Brent now within striking distance of the psychologically important $100 per barrel threshold. Any further attacks on oil tankers or disruption to Middle Eastern supply routes could provide another catalyst for prices to move above that level.