The price of oil surged and global shipping faced major disruption Tuesday as Iran effectively blocked the Strait of Hormuz, a critical artery for global energy supplies, in retaliation for joint strikes by the United States, and Israel. The action follows a weekend offensive that reportedly killed Iranian Supreme Leader Ayatollah Ali Khamenei and hundreds of others, according to preliminary reports from the Iranian Red Crescent.
Iran’s Islamic Revolutionary Guard Corps warned that passage through the strait was “not authorized” and threatened to “burn any ship” attempting to transit, according to security agencies monitoring the region. Initial reports Sunday indicated several vessels had already been impacted, prompting major shipping firms to halt passage. More than 200 ships, primarily tankers carrying methane and gas, are currently stalled around the strait, though some vessels are attempting passage whereas disabling their GPS tracking systems, according to reports.
The disruption immediately impacted energy markets. Brent crude oil prices jumped from $50 to $80 per barrel, while European gas prices briefly exceeded €65 per megawatt-hour – a level not seen since January 2023. Concerns are mounting over supply security, particularly for Asian nations heavily reliant on the strait. “Asian countries are very exposed. For Japan and South Korea, 60% of their oil passes through the Strait of Hormuz,” noted Bruno Fernandes, a macroeconomist at the Coface credit insurance firm.
The U.S. State Department has ordered non-emergency government personnel and their families to depart from Jordan, Bahrain, Iraq, Qatar, Kuwait, and the United Arab Emirates, citing security concerns. The U.S. Embassy in Riyadh was reportedly hit by two suspected Iranian drones on Tuesday, prompting its closure. Another U.S. Embassy in Kuwait announced a temporary closure as well. Three U.S. Soldiers have been killed and five others seriously injured since the start of the operation against Iran, according to a statement released Sunday by Washington.
Israel is also facing direct attacks, with missiles striking multiple cities and causing at least ten deaths and injuries. Israeli forces have simultaneously continued strikes on Lebanon, targeting both Iranian military sites and Hezbollah positions, and have seized additional locations in southern Lebanon. The Israeli military has also closed all crossings in and out of the occupied West Bank.
The initial strikes by the U.S. And Israel on Saturday targeted sites in Tehran, Isfahan, Karaj, Kermanshah, Qum, and Tabriz. The offensive followed weeks of military buildup and threats from former President Trump, who stated the goal was to prevent Iran from obtaining a nuclear weapon and “to defend the American people by eliminating imminent threats from the Iranian regime.”
As of Tuesday, more than 787 people have been killed in Iran since the conflict began, according to Iran’s semi-official Tasnim news agency. One Tehran resident described enduring a “heavy bombardment” Monday night, stating, “It feels like an onslaught.”
