Oil Market Rises as Tensions Escalate in the Strait of Hormuz

Global oil prices have risen further amid fears that the ongoing conflict in the Middle East could be prolonged. Alongside retaliatory military actions by Iran and the United States, renewed uncertainty over shipping through the Strait of Hormuz has raised concerns among market participants about major disruptions to oil supplies. As a result, the risk premium in the crude oil market is also increasing.

According to Reuters, as of 12am Greenwich Mean Time on Monday (September 7), the international benchmark Brent crude price rose by 34 cents, or 0.35 percent, to $97.34 per barrel. Earlier in the day, Brent climbed as high as $97.93, reaching its highest level since July 24. Meanwhile, US West Texas Intermediate (WTI) crude rose by $1.15, or 1.26 percent, to $92.63 per barrel.

One of the main reasons for renewed pressure on the oil market is the growing security risk surrounding the Strait of Hormuz. Before the conflict began, around 18 million barrels of oil were transported daily from the Middle East through this vital maritime route for global energy supplies. Amid the conflict, the flow has fallen to around 11 million barrels. However, Reuters reported that around 4–5 million barrels of oil are still passing through the Strait of Hormuz each day.

Iran’s new threat has further complicated the situation. Tehran said it would retaliate if the United States launches fresh attacks on Iranian facilities or assets. On Tuesday, Iran also announced plans to declare a new maritime “exclusion zone” in the Persian Gulf. This has raised concerns that shipping through the Strait of Hormuz could face further disruptions.

Reuters said that although oil supplies from the Middle East have declined, the global market has not yet experienced a major shortage. Saudi Arabia and Iraq are trying to maintain supplies by using alternative export routes. At the same time, production could increase in several non-OPEC countries, including the United States, Canada and Guyana.

For these reasons, Brent prices have not yet exceeded $100 per barrel. However, concerns are growing that a prolonged conflict and continued disruptions to shipping could further intensify the supply shortage.