LONDON — Global oil prices surged more than 4% on Monday after said the US Navy had intercepted and seized an Iran-flagged cargo ship, escalating tensions around a key global oil route.
The international benchmark, Brent crude, climbed to about $94.20 a barrel, reversing losses from the previous session when Iran had indicated the would remain open during a ceasefire.
Iran later said it was closing the strait again, warning that any vessel approaching the waterway could be targeted. The strait is a critical النفط corridor through which roughly 20% of the world’s oil and liquefied natural gas supplies pass.
Energy markets have been highly volatile since the outbreak of conflict between the US, Israel and Iran earlier this year, with prices swinging sharply in response to military actions and political statements.
Analysts say the latest price jump reflects heightened uncertainty rather than fundamental changes in supply. Saul Kavonic of MST Marquee said markets are reacting to shifting signals from both Washington and Tehran, noting that developments are “playing out in real time” in the Gulf.
Despite diplomatic efforts, uncertainty remains over possible negotiations. The US has said officials will meet counterparts in Pakistan, with Vice-President expected to lead the delegation. However, Iranian state media reported that Tehran currently has no plans to participate.
The said it had ended a brief reopening of the strait, accusing the US of violating ceasefire terms through its naval presence. Washington has indicated the blockade will remain until an agreement is reached.
Financial markets showed mixed reactions. US stocks edged lower in early trading, while European markets declined more sharply. In contrast, Asian markets closed higher earlier in the day.
The ongoing crisis has triggered a global energy crunch, with countries — particularly in Asia — facing supply disruptions and rising fuel costs. Governments across the region have introduced energy-saving measures, including reduced working hours and limits on power use, as they grapple with the impact of restricted flows through the Strait of Hormuz.
Industry experts warn that continued disruption could further strain global supply chains, with potential knock-on effects on transport, manufacturing and household energy prices worldwide.