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Iran Closes Hormuz Strait, Oil Jumps Above $75 on Supply Fears
Brent crude hit $75.32 after Iran shut the 21-mile strait to all commercial shipping in response to U.S. airstrikes. A week-long blockade would drain 140 million barrels, traders said.
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Oil prices jumped above $75 a barrel Tuesday after Iran closed the Strait of Hormuz to oil tankers and commercial vessels. The move retaliates for U.S. airstrikes that hit military targets near Bandar Abbas, the Pentagon said.
Brent crude rose 4.8% to $75.32, its highest since early May. West Texas Intermediate gained 5.1% to $71.18. The spike was the sharpest single-day move since the October 2023 Hamas attack on Israel.
Tehran's Revolutionary Guards blocked the 21-mile-wide passage between Oman and Iran that handles most Gulf crude exports. The closure followed hours after U.S. warplanes struck Iranian air-defense and radar sites.
Traders said the immediate risk is a supply cliff. If the blockade holds for more than a week, refiners in Asia and Europe that rely on Saudi, Iraqi, and Kuwaiti crude will need to draw down strategic reserves or bid up alternative grades from the North Sea and West Africa. The U.S. has enough Strategic Petroleum Reserve capacity to cover about 30 days of lost Gulf supply. Releasing it would take congressional approval.
The last time Iran threatened the strait was 2019, after the U.S. killed Qasem Soleimani. That blockade lasted four days and added $3 to the barrel. The current closure is broader – it covers all commercial shipping, not just tankers. It follows a direct military exchange, not a drone strike.