Oil prices climb but don't soar after U.S. strike, Iranian threats
Crude oil prices jumped — but didn't head for the stratosphere — as trading markets opened for the first time since the U.S. attack on Iranian nuclear facilities.
Why it matters: It shows elevated risk of the conflict crimping oil flows in the region, something that has not yet occurred.
Yes, but: The rather modest movement also suggests traders aren't putting much stock — for now — in reported calls by Iran's parliament to close the Strait of Hormuz, which would require approval from top regime officials.
The strait is the critical waterway between Iran and Oman that handles roughly a fifth of the global oil trade.
Driving the news: The global benchmark Brent crude is up roughly 2.4% to nearly $79-per-barrel after initially jumping above $81 when markets opened.
The Israel-Iran conflict has sent prices to their highest levels since January.
What they're saying: The Brookings Institution's foreign policy director Suzanne Maloney, in a post, called the Iranian parliamentary call to close Hormuz "purely symbolic."
"[S]uch a step would further cripple its own battered economy and jeopardize its fragile but valuable rapprochement with Saudi Arabia and the other Arab states along the Persian Gulf," she writes.
What we're watching: The effect on U.S. gasoline prices, which today average roughly $3.21 per gallon, as the July 4 holiday weekend nears.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNN
12 minutes ago
- CNN
What is the Strait of Hormuz and why is it so significant?
While there have been no major disruptions to the global oil supply so far, the attacks on Iran – by Israel and then the US – have rattled investors, sending oil futures soaring by around 10%, among fears Iran could retaliate by disrupting shipping in the Strait of Hormuz. From the perspective of the global economy, there are few places as strategically important. The waterway, located between the Persian Gulf and the Gulf of Oman, is only 21 miles wide at its narrowest point. It's the only way to ship crude from the oil-rich Persian Gulf to the rest of the world. Iran controls its northern side. About 20 million barrels of oil, about one-fifth of daily global production, flow through the strait every day, according to the US Energy Information Administration (EIA), which called the channel a 'critical oil chokepoint.' On Sunday evening, following US airstrikes on three of Iran's nuclear facilities, Brent crude, the global benchmark, briefly surged above $80 per barrel, according to Refinitiv data, the first time that's happened since January. Before the conflict, prices had largely hovered between $60 and $75 a barrel since August 2024. Brent last traded at $78.2 per barrel, while WTI, the US benchmark, was at $75.06. Whether oil prices will climb further now depends on Iran's response. Rob Thummel, senior portfolio manager at energy investment firm Tortoise Capital, told CNN that a potential disruption to the Iran-controlled sea route would cause oil prices to surge toward $100 per barrel. A functioning Strait of Hormuz is 'absolutely essential' to the health of the global economy, he said. A prominent adviser to Iran's supreme leader, Ayatollah Ali Khamenei, has already called for the closure of the Strait. 'Following America's attack on the Fordow nuclear installation, it is now our turn,' warned Hossein Shariatmadari, the editor-in-chief of the hardline Kayhan newspaper, a well-known conservative voice who has previously identified himself as a 'representative' for Khamenei. Geographic leverage over global shipping gives Iran the 'capacity to cause a shock in oil markets, drive up oil prices, drive inflation, collapse Trump's economic agenda,' Mohammad Ali Shabani, an Iran expert and editor of the Amwaj news outlet, told CNN. When it comes to moving oil, the Strait is actually much narrower than its 21-mile official width. The navigable shipping lanes for massive supertankers are only about two miles wide in each direction, requiring vessels to pass through both Iranian and Omani territorial waters. A closure of the Strait will be particularly detrimental to Asian economies which rely on the crude oil and natural gas shipped through the route. The EIA estimates that 84% of the crude oil and 83% of the liquefied natural gas that moved through the Strait of Hormuz last year went to Asian markets. China, the largest buyer of Iranian oil, sourced 5.4 million barrels per day through the Strait of Hormuz in the first quarter this year, while India and South Korea imported 2.1 million and 1.7 million barrels per day, respectively, according to the EIA's estimates. In comparison, the US and Europe imported just 400,000 and 500,000 barrels per day, respectively, in the same period, according to the EIA. On Sunday, India's Minister for Petroleum and Natural Gas Hardeep Singh Puri sought to reassure jittery investors on X that the country has 'diversified' its oil supplies in the past few years. On Sunday, India's Minister for Petroleum and Natural Gas Hardeep Singh Puri said on X that the country has 'diversified' its oil supplies in the past few years. 'A large volume of our supplies do not come through the Strait of Hormuz now. Our Oil Marketing Companies have supplies of several weeks and continue to receive energy supplies from several routes,' he said. 'We will take all necessary steps to ensure stability of supplies of fuel to our citizens.' CNN's John Towfighi, Nadeen Ebrahim, and Rhea Mogul contributed reporting.
Yahoo
12 minutes ago
- Yahoo
Oil prices climb on fears Iran will blockade supplies
STORY: Oil prices climbed to their highest in five months on Monday as fears grew over what conflict in the Middle East could mean for supplies. Traders are waiting to see what Iran does next, after the U.S. struck its key nuclear facilities. Media reports say the country's parliament has approved a move to close the Strait of Hormuz. That's the narrow waterway between Iran and Oman, through which around a fifth of the world's oil is moved. Although there are also pipeline routes out of the region, experts say they won't be enough to make up for a halt to shipping. The concerns saw international benchmark Brent crude up around 1.5% in Asian morning trade Monday, with U.S. crude posting similar gains. Both are up 10% or more since the conflict began. One analyst told Reuters that a move by Iran to disrupt shipping could see oil hit $100 per barrel, up from around $78 now. That could spur inflation and mean higher gasoline prices around the world. Stock prices headed the other way on Monday, with Japan's Nikkei index down 0.5% early on. But analysts said there was no sign yet of panic selling across markets. Optimists cited hopes that regime change in Iran could bring a more moderate government to power. Though analysts at JPMorgan cautioned that past episodes of upheaval in the Middle East typically resulted in oil prices spiking by 76%.
Yahoo
31 minutes ago
- Yahoo
Strait of Hormuz: What is it, and could Iran close it?
The Brief Iran could retaliate after the U.S. attacked with a disruption at the Strait of Hormuz. A disruption at the major transit site could affect oil trade, significantly increasing the price we pay for gas here in America. Some 20% of all oil traded globally passes through the strait. The world is anticipating what comes next after the U.S. inserted itself into the war between Israel and Iran Saturday with a surprise attack on three of Iran's nuclear sites. Many are suggesting that Iran's next move could involve a disruption at the Strait of Hormuz, an international transit route. Here's what to know: On the map The Strait of Hormuz is the narrow mouth of the Persian Gulf that flows into the Gulf of Oman, where ships can then travel to the rest of the world. The Strait is in the territorial waters of Iran and Oman. By the numbers At its narrowest point, it is just 21 miles wide. The width of the shipping lane in either direction is only 2 miles wide. RELATED: US bombs Iran latest: Iran's nuclear ambitions 'obliterated,' Hegseth says By the numbers Some 20% of all oil traded globally passes through the strait, according to The Associated Press. Why you should care Anything affecting the strait ripples through global energy markets, raising the price of crude oil. That then trickles down to consumers through what they pay for gasoline and other oil products. Oil prices have already increased as the war between Israel and Iran has intensified, climbing by 21% over the past month. The backstory Iran has threatened before to close off the strait amid tensions with the U.S., and the disruption could be one way Iran retaliates after the U.S. bombed three of its nuclear sites on Saturday. Big picture view As of Sunday afternoon, several outlets had begun reporting that Iran's parliament had endorsed closing off the passageway. In a lesser move, Iran could cause a short-term blockage in the strait with its fleet of fast-attack boats and thousands of naval mines. It could also fire missiles from its long Persian Gulf shore. Any blockage would surely cause a fast-moving response from the U.S., which has its superior 5th Fleet stationed nearby in Bahrain. But even a relatively brief interruption could paralyze shipping traffic and spook investors, causing oil prices to spike and generating international pressure for a ceasefire. The backstory Airstrikes that began earlier this month by Israel targeted Iran's nuclear facilities and generals, prompting retaliation from Iran and creating a series of events that contributed to the U.S. attack. What they're saying Defense Secretary Pete Hegseth said at a news conference that America "does not seek war" with Iran while Vice President JD Vance said the strikes have given Tehran the possibility of returning to negotiate with Washington. RELATED: Read full remarks of what Trump said about bombing Iran What's next The Trump administration on Sunday signaled a willingness to renew talks with Iran and avoid a prolonged war. RELATED: Who are Iran's allies? Meanwhile Iran criticized the actions as a violation of its sovereignty and international law. Iran's foreign minister, Abbas Araghchi, said Washington was "fully responsible" for whatever actions Tehran may take in response. "They crossed a very big red line by attacking nuclear facilities," he said at a news conference in Turkey. "I don't know how much room is left for diplomacy." The Source Information in this article was taken from The Associated Press' previous reporting on the Strait of Hormuz, and from remarks at a press conference the morning of June 22, 2025. This story was reported from Detroit.
