Oil Rises as Hormuz Disruption Tightens Supply
Brent climbs above $83 as US-Iran conflict disrupts Gulf oil flows and stalls shipping through the Strait of Hormuz.
Oil prices climbed on Thursday as escalating conflict between the United States and Iran disrupted energy flows through the Strait of Hormuz, raising concerns about global supply security and pushing crude benchmarks higher in early Asian trading.
Brent crude futures rose $1.67, or 2.05%, to $83.07 per barrel by 0141 GMT. U.S. West Texas Intermediate crude gained $1.94, or 2.60%, to trade at $76.60 per barrel.
Read More: Oil prices jump as Iran conflict disrupts flows
Markets reacted to growing supply risks after the U.S.–Iran war widened on Wednesday following a U.S. strike on an Iranian warship near Sri Lanka. Political tensions intensified further after U.S. Senate Republicans voted against a bipartisan resolution aimed at halting the military campaign and requiring congressional authorization for hostilities against Iran.
Energy traders increasingly fear prolonged disruptions to shipments through the Strait of Hormuz, one of the world’s most critical oil transit chokepoints. According to the U.S. Energy Information Administration, roughly 20% of global petroleum liquids consumption passes through the narrow waterway connecting the Persian Gulf to international markets.
Shipping through the strait has slowed dramatically for a fifth consecutive day during the conflict. Iran’s retaliatory posture and elevated maritime security risks have discouraged tanker traffic, effectively choking off oil and gas exports from the Gulf region.
Iraq, the second-largest oil producer in the Organization of the Petroleum Exporting Countries, has already cut production by nearly 1.5 million barrels per day due to limited storage capacity and restricted export routes, according to officials cited by Reuters. Iraq typically produces more than 4 million barrels per day and relies heavily on Gulf export terminals for international shipments.
Meanwhile, Qatar declared force majeure on its liquefied natural gas exports on Wednesday, citing operational disruptions linked to the conflict. Industry sources said it could take at least a month for LNG production and shipping schedules to return to normal levels.
Qatar is the world’s largest exporter of liquefied natural gas and a key supplier to Asian and European energy markets. According to the International Energy Agency, Qatar exported about 77 million tonnes of LNG annually before the current disruptions.
The conflict has also heightened security concerns across Gulf shipping lanes. Britain’s maritime trade operations agency reported that the master of a tanker anchored about 30 nautical miles southeast of Kuwait’s Mubarak Al Kabeer port heard and saw a large explosion nearby. A small vessel was later observed leaving the area, adding to concerns about maritime safety in the region.
Despite the heightened tensions, analysts note that Iran has so far avoided directly targeting major oil production infrastructure. However, shipping risks remain extremely elevated, according to a client note issued by JPMorgan.
The bank estimated that about 329 oil tankers are currently stranded in Gulf waters as operators assess security conditions and await safe passage routes. The buildup of vessels has intensified concerns about short-term supply bottlenecks and logistical constraints affecting global oil markets.
Energy analysts say the length of the U.S. military campaign could be influenced by regional storage capacity and prevailing oil prices. Gulf Cooperation Council countries including Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain maintain significant storage and export infrastructure, but prolonged disruption could strain logistics.
JPMorgan said most oil fields in the region could restart production relatively quickly once transport routes reopen. Output typically returns to full capacity within two to three weeks, although some reservoirs require gradual pressure restoration.
The bank noted that Iraq faces additional operational challenges because its oil production relies heavily on water injection systems to maintain reservoir pressure. Even so, analysts say the primary constraint currently affecting the market is transportation and export logistics rather than underlying resource availability.
The crisis comes at a time when global oil demand remains robust despite economic uncertainties. According to the International Energy Agency’s latest market outlook, global oil demand is expected to exceed 103 million barrels per day in 2026, driven largely by consumption growth in Asia.
Traders are now closely monitoring developments around the Strait of Hormuz and the broader U.S.–Iran conflict for signs of escalation or diplomatic de-escalation. Any prolonged disruption to Gulf energy flows could tighten global supply balances and keep crude prices elevated in the coming weeks as markets assess the geopolitical risk premium surrounding Middle East oil exports.