Global oil markets tighten as Hormuz shipping remains uncertain
The United States says it is making progress in reopening the Strait of Hormuz, but oil prices have climbed sharply, with Brent crude exceeding $107 a barrel. Washington claims about 10 million barrels per day are passing through, but Iran disputes control and has announced restricted shipping zones. Attacks on shipping and a Saudi pipeline shutdown have added to supply concerns.
Before the February conflict, more than 100 vessels moved through the strait daily, carrying roughly 20 million barrels of oil. Recent tracking shows that number has collapsed to single digits on some days, with only 14 transits recorded over the weekend — four exiting the Gulf and ten entering. Some vessels switch off their transponders, so official counts may understate actual traffic.
Saudi Arabia's East-West pipeline, a key alternative route bypassing Hormuz, was forced offline by a drone strike launched from Iraqi territory. The pipeline had been carrying exports to the Red Sea as a workaround to the Iranian blockade. If it remains closed, roughly four percent of global supply could be affected, compounding the pressure on already elevated prices.
The combination of Hormuz disruption and the Saudi pipeline shutdown could have wide-reaching effects. Higher crude prices may translate into increased fuel costs for households and businesses globally, potentially feeding inflation and slowing economic activity. Energy-importing nations in Asia and Europe could face the most acute pressure, while shipping insurers may raise premiums for Gulf routes. Consumers may see price increases at the pump within weeks, and governments could face renewed pressure to address energy security.