Oil prices jumped on Thursday for a fifth straight day as the escalating U.S.-Iran conflict pushed two vital shipping corridors toward closure, with traders racing to price in the risk that both could shut at once.
Brent crude futures jumped $3.80, or 4%, to $97.87 a barrel by 07:44 GMT, the international benchmark’s highest level since June 3. U.S. West Texas Intermediate crude was not far behind, climbing $2.80, or 3.2%, to $89.63 after touching an intraday peak not seen since June 11.
The moves mark one of the sharpest weekly run-ups in oil this year, and analysts said the rally has further to go if either chokepoint tightens further.
The latest jolt came from the Strait of Hormuz, the narrow waterway between Iran and Oman through which roughly a fifth of the world’s seaborne oil passes. Iran’s Revolutionary Guards said Thursday that a tanker caught fire after an explosion while attempting to navigate a mined section of the strait’s southern approaches near the Omani coast and that two other vessels had been forced to turn back.
The Guards went further, declaring the strait “completely closed” and under their full control for as long as U.S. military action in the region continues.
In a stark warning to shipowners and insurers worldwide, Tehran said no tanker would be permitted to enter or exit the strait without prior coordination with Iranian authorities, a claim that, if enforced, would amount to a de facto blockade of one of the global economy’s most important arteries.
“The immediate outlook for crude oil remains supportive as markets price a worrying probability of supply interruptions in a second chokepoint,” said Ahmad Assiri, a research strategist at Pepperstone, capturing a sentiment that has gripped trading desks from London to Singapore this week.
Compounding the pressure, Yemen’s Houthi movement has opened a new and increasingly disruptive front hundreds of miles to the southwest, in the Bab el-Mandeb strait separating the Horn of Africa from the Arabian Peninsula.
The Iran-aligned group said Thursday it had struck two Saudi oil tankers as part of a declared naval blockade aimed at choking off Saudi crude exports, a direct escalation of a campaign that had, until recently, focused mainly on shipping linked to Israel.
The stakes in that theater are considerable. Goldman Sachs estimates that oil flows through Bab el-Mandeb have averaged nearly 9 million barrels per day over the past month, of which close to 4 million bpd could prove extremely difficult to reroute if multiple regional chokepoints are effectively sealed at the same time.
With tankers already wary of Hormuz, the prospect of a second blocked corridor has left shipping companies with dwindling options for moving Gulf crude to global markets.
The Pentagon confirmed the U.S. military carried out its twelfth consecutive night of strikes on Iranian targets, extending an air campaign that shows no sign of winding down.
The renewed bombardment came just hours after President Donald Trump issued a blunt public warning to Tehran, vowing that the United States would destroy an Iranian bridge or power plant every time Iran fires on a vessel transiting the Strait of Hormuz, a tit-for-tat formula that raises the prospect of an escalating cycle of infrastructure strikes on both sides.
The threat underscores how far the conflict has moved from its origins toward a broader war of attrition over control of Gulf shipping lanes, with energy infrastructure now explicitly in the crosshairs of both governments’ strategies.
Goldman Sachs said in a note that it expects oil prices to hold onto most of their recent gains through July and August, pointing to a confluence of bullish factors: falling global inventories, reduced Middle Eastern output as producers grapple with the security situation, robust seasonal summer travel demand in the Northern Hemisphere, and a marked slowdown in releases from strategic petroleum reserves that had previously helped cushion supply shocks.
Taken together, traders and analysts say the market is no longer treating the Gulf disruption as a transient risk premium, but as a structural shift in the supply picture, one that could keep crude prices elevated well into the autumn if the standoff at Hormuz and the blockade attempt in the Red Sea are not resolved.
WHAT YOU SHOULD KNOW
Oil markets are now pricing in the risk of two Gulf shipping chokepoints closing at once, not just one. With Iran claiming full control of the Strait of Hormuz and the Houthis opening a new blockade front against Saudi tankers in the Bab el-Mandeb Strait, roughly 9 million barrels a day of crude are exposed, and up to 4 million bpd of that may be nearly impossible to reroute.
That’s why Brent has jumped to $97.87 and WTI to $89.63, and why analysts expect prices to stay elevated through the summer: this isn’t a temporary risk premium, it’s a structural supply threat.
