Hormuz tanker attack pushes Brent crude to $90.95 as US-Iran strikes escalate
A tanker attack and fresh Iranian strikes on US bases have brought Strait of Hormuz traffic to a near standstill, driving Brent crude above $90 and raising the threat of renewed energy inflation for Europe.
Iran's Revolutionary Guard attacked US military assets in Bahrain and Kuwait on Tuesday, while a commercial oil tanker was struck by an unknown projectile off the coast of Oman. The incidents mark the latest escalation in a conflict that has effectively shuttered the Strait of Hormuz, the world's most critical oil and gas chokepoint.
The Guard claimed it hit air defence systems and a radar in Bahrain, as well as missile defence and satellite receiving equipment in Kuwait. "With this radar sweep, the enemy should prepare for even more decisive and powerful waves of drone and missile attacks," the IRGC wrote in a statement. The group also said it intercepted two "non-compliant oil tankers" in the strait following explosions and fires.
The United States, now in its tenth consecutive night of strikes against Iran, said it targeted command centres, maritime capabilities, and missile and drone launch sites. "US forces struck Iranian military command centers, maritime capabilities, missile and drone launch sites, and air defence systems to degrade Iran's ability to continue attacking commercial vessels," US Central Command wrote on X.
For European economies highly sensitive to energy costs, the immediate economic consequence has been a sharp rise in the price of crude. Traffic through the strait has ground to an almost complete halt, pushing the international Brent benchmark up 3.2% to $90.95 per barrel. US crude climbed 2.8% to $84.04 per barrel.
Despite the military escalation, parallel diplomatic tracks are emerging. Iran's interior minister, Eskandar Momeni, travelled to Islamabad on Monday for talks with Pakistani Prime Minister Shehbaz Sharif, though it remains unclear if the visit is tied to Pakistan's mediation efforts. A day earlier, US Secretary of State Marco Rubio signalled a willingness to negotiate, provided any deal is "real" and one that Iran is "willing to live by."
Until a diplomatic breakthrough materialises, the physical risks to commercial shipping and the economic risks to European energy markets will likely remain elevated. The UK Maritime Trade Operations agency confirmed the Oman tanker's crew abandoned the vessel for a lifeboat, underscoring the perilous conditions in the waterway.
