TOKYO – Oil jumped as the United States and Iran exchanged fresh strikes, with the sides offering conflicting statements on whether the Strait of Hormuz remains open to shipping.
Brent crude rose 3.2 per cent to US$78.43 a barrel as at 7am Singapore time, after gaining 5.4 per cent last week. US West Texas Intermediate also traded 3.2 per cent higher at US$73.69. European natural gas added as much as 2.7 per cent.
Iran said the strait would now be closed “until further notice” – a statement denied by US Central Command, which said that its forces started more attacks to ensure freedom of navigation through the waterway.
The uncertainty is reinserting a war premium into crude prices, which had erased gains after an interim peace deal between the sides offered the prospect of more supply from the Persian Gulf. The flare-up risks derailing efforts to rebuild depleted global oil inventories later in 2026, the International Energy Agency said on July 10 – a reminder of what’s at stake for the global economy if the conflict continues.
There was almost no traffic through the strait – which normally carries about a fifth of global crude and liquefied natural gas supply – on July 12, with only two oil products tankers seen approaching the chokepoint. Even so, the Joint Maritime Information Center said the southern shipping lane coordinated by Oman remains available.
The latest escalation also dimmed prospects for diplomacy. Iran’s Parliament Speaker and top negotiator Mohammad Bagher Ghalibaf declared the “era of one-sided deals is OVER,” while Tehran insisted Washington must first honor prior commitments on Hormuz transits and the normalization of its oil exports before talks can resume. US President Donald Trump, meanwhile, declared the ceasefire “OVER” but said the US remained willing to continue negotiations. BLOOMBERG
