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US crude oil prices are due to open 7% higher at $71 a barrel after the opening two days of Operation Epic Fury against Iran.
Oil prices are now due to open the trading week at the highest levels since June 2025, when the US and Israel launched strikes against Iran’s nuclear facilities.
Experts are predicting that crude could rise to $100 a barrel if there are “significant and extended oil supply disruptions.”
However, if the situation stabilizes, prices will become less volatile due to plentiful global production.
Worries center on the Strait of Hormuz, through which a significant proportion of the world’s oil passes.
The Strait of Hormuz connects the Persian Gulf to the Gulf of Oman and the Arabian Sea, and is the only sea passage for traffic leaving the Persian Gulf.
At its narrowest, the Strait is just 21 miles wide and is one of the world’s most crucial chokepoints for the flow of oil and liquified natural gas.
Around 20 million barrels of crude oil and 100 billion cubic meters of natural gas pass through the Strait each day.
Because there are few realistic alternatives for the transport of these resources, any disruption to traffic through the Strait can have significant effects on energy prices and the broader global economy.
On Sunday, a tanker was attacked there.
Oman’s Maritime Security Centre announced the tanker was attacked around five nautical miles (9.26km) north of Khasab Port.
There were reported to be 20 crew members on board, including 15 Indian nationals and 5 Iranians, all of whom have been evacuated from the ship.
At least four people are believed to have been injured.
Although there has yet to be confirmation of who attacked the vessel, Iran’s Revolutionary Guard Corps is the most probable culprit, after declaring on Saturday that the Strait would be closed to international navigation.
Following the US and Israeli strikes on Iran, the IRGC issued radio warnings that the Strait is closed.
Despite the lack of an official declaration, traffic through the Strait has been severely affected by the renewal of hostilities against Iran. Many ships are now holding off the coast of Oman or turning around.
Major shipowners have halted operations through the Strait, and marine insurers have halted coverage for voyages in the area.
