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Oil Jumps 2.85% After UKMTO Raises Hormuz Threat to Severe
Iran says it controls Strait of Hormuz traffic as UKMTO raises threat level to severe. WTI crude surged $1.96 to $70.56, the biggest single-day gain in weeks.
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Iranian state-run Press TV reported Monday that traffic in the Strait of Hormuz is being conducted according to Tehran's arrangements, hours after the United Kingdom Maritime Trade Operations raised the threat level in the waterway to severe.
West Texas Intermediate crude jumped $1.96, or 2.85%, to $70.56 a barrel, near the session's high. The move came as the UKMTO warned that deliberate hostile action is likely under current conditions and that mine-risk reporting remains relevant within and adjacent to the Traffic Separation Scheme. The agency cited persistent navigation interference and routing pressure from Iran’s Islamic Revolutionary Guard Corps, particularly against vessels broadcasting Automatic Identification System signals.
The Strait of Hormuz handles roughly a fifth of the world’s oil supply. Any disruption to tanker traffic there typically triggers an immediate security premium in crude prices. The UKMTO’s escalation to “severe” – its highest advisory level – signals that the threat environment has shifted from potential to probable.
Press TV, citing Iranian officials, said the country's arrangements ensure safe passage but did not detail what those arrangements entail. The report offered no timetable for the measures.