Global oil markets were thrown into disarray on Monday as the Strait of Hormuz — one of the world’s most critical shipping lanes — faced effective closure following intensified military conflict in the Middle East. Brent crude surged by as much as 13% during early trading, briefly touching $82 a barrel, the highest level seen in 14 months. Even after a partial retreat, prices remained around 6% higher at $77 per barrel.
The Strait of Hormuz carries approximately one-fifth of the world’s oil supplies and a significant portion of seaborne liquefied natural gas. Iran reportedly warned tankers shortly after military strikes began that no ships would be permitted to pass through. Marine tracking systems confirmed that tankers were piling up on both sides of the strait, either unwilling to risk attack or unable to secure shipping insurance.
Qatar’s state energy company announced it had suspended LNG production following drone attacks on its major facilities. The shutdown at what is one of the world’s largest LNG export hubs could remove close to 20% of global LNG supply from the market. European gas prices leapt 41% in response, and UK gas prices rose 40%, marking one of the sharpest single-day spikes in recent memory.
The International Maritime Organization urged all vessels to avoid the strait until conditions improved. Major shipping company Maersk halted transits through both the Strait of Hormuz and the Suez Canal for safety reasons. Two ships had already been attacked in the strait, according to maritime security agencies, heightening fears among shipowners and insurers.
Energy analysts cautioned that unless normal flows through the strait are restored quickly, oil prices could climb above $100 a barrel. OPEC+ had agreed to modestly boost output, but with most of that production located in the Middle East, much of it faces the same export barriers as other regional producers. The situation represents what one consultancy described as a dual supply shock to global oil markets.