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2w ago

Escalating Israel-Iran Air War Forces Shipping Precautions, Fuels Oil Market Volatility

Heightened airstrikes prompting energy firms to reroute vessels signal markets, governments, traders to brace for surging costs, supply strains.

Oil tankers pass through the Strait of Hormuz, December 21, 2018. REUTERS/Hamad I Mohammed/File Photo
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A pumpjack operates at the Vermilion Energy site in Trigueres, France, June 14, 2024. REUTERS/Benoit Tessier/File Photo

Overview

  • The air war between Israel and Iran has entered its seventh day, renewing concerns that Tehran may target the Strait of Hormuz and disrupt roughly 20% of global oil flows.
  • Shell CEO Wael Sawan said the company is very careful with tanker movements in the Middle East and warned that electronic jamming of navigation systems has heightened supply chain risks.
  • Brent crude prices have hovered near $78 per barrel while West Texas Intermediate has traded around $75, with volatility spiking on fears of conflict spillover and U.S. intervention.
  • President Donald Trump has approved a military strike plan against Iran but withheld final authorization as he weighs whether Tehran will meet his demands.
  • South Korea’s trade agency KOTRA launched an emergency task force, warning that extended hostilities could reverse export gains to the Middle East and disrupt regional trade flows.