Escalating Middle East tensions drove crude oil prices sharply higher on Tuesday, with Brent futures breaking past $103 per barrel as scepticism mounts over whether President Donald Trump can rally a credible international force to protect tankers transiting the Strait of Hormuz.
The international Brent benchmark jumped 3.2 per cent, or $3.21, to close at $103.42—a level not seen since late 2024—while West Texas Intermediate climbed 2.9 per cent, or $2.71, to settle at $96.21. Investors are increasingly alarmed by supply risks after Iranian attacks halved tanker traffic through the strait in recent weeks, data from shipping tracker Kpler reveals.
Trump vented frustration on social media, stating that NATO allies “do not want to participate” in the U.S. confrontation with Iran. “The U.S. does not need the help of its allies,” he added, signalling reluctance to depend on partners despite urgent calls for joint naval operations to secure the vital waterway.
This 33-kilometre-wide chokepoint between Oman and Iran handles about 21 million barrels of oil and products daily, nearly one-fifth of global supply according to the U.S. Energy Information Administration. Crude alone accounted for 13 million barrels per day last year, or 31 per cent of seaborne trade, Kpler estimates.
Strikes since February have stranded numerous very large crude carriers, forcing detours around Africa that have ballooned shipping costs by 150 per cent, as reported by Bloomberg.
“The sheer scale of the oil supply disruption makes it difficult for the market to find an adequate solution,” observed Warren Patterson, head of commodities strategy at ING. “While the U.S. administration has touted the idea of insurance guarantees and naval escorts, neither has materialized yet,” he added.
Experts warn that escorting merchant ships could expose warships to Iranian fast boats and missiles, prompting the U.S. to hold back until Tehran’s threats weaken—reminiscent of 1980s Tanker War strategies.
OPEC+ output curbs offer little relief, leaving Asian buyers like India’s Reliance turning to costlier U.S. and Russian supplies. Goldman Sachs now predicts Brent at $105 on average through mid-2026 if flows fall further.