Global oil markets are under renewed stress as the Strait of Hormuz blockade entered its fifth day, raising fears of supply disruption from the Middle East. Prices jumped in early Thursday trading, with traders reacting to slower maritime traffic, heightened security incidents near shipping lanes, and reduced export capacity. Brent crude was reported around $84 per barrel after a strong move higher, while Murban crude surged close to the $90 mark. Alongside oil, the crisis is also affecting gas markets, with Qatar declaring force majeure on LNG shipments. For import-dependent countries, sustained disruption can raise energy bills, increase inflation pressure, and push up logistics and insurance costs.
Oil and Gas Prices Jump as Shipping Risks Rise
Oil prices climbed as traders priced in the risk that crude flows could stay constrained if the Hormuz route remains unsafe. Reports showed Brent crude rising by about 3% to around $84 per barrel in early session dealings, while US WTI gained over 3% to about $77. Murban crude saw an even sharper move, jumping more than 8% to roughly $88.44 per barrel, reflecting tightness in certain regional grades.
Beyond the headline price moves, the main driver is uncertainty. When shipping slows, even if production continues, the market can tighten because barrels cannot move to buyers on time. That is why insurance premiums, freight costs, and charter rates typically rise in parallel during such crises, adding another layer of cost to global energy trade.
Conflict Escalation Adds Pressure to Supply Routes
The situation has worsened after reports that a US strike targeted an Iranian ship in the Indian Ocean, expanding the conflict beyond the immediate Gulf region. At the political level, US lawmakers in the Senate rejected a bipartisan resolution aimed at halting military operations and hostilities against Iran, suggesting the crisis may not de-escalate quickly.
Maritime security concerns also increased after Britain’s maritime trade monitoring agency reported an explosion near a tanker positioned southeast of Kuwait’s Mubarak Al Kabeer port. Even a single incident near major routes can make ship operators pause, because the cost of a damaged vessel or cargo can be enormous. When the risk-to-reward balance shifts, tankers often wait offshore, creating a backlog that tightens supply for downstream markets.
Iraq Output Drop and Qatar LNG Force Majeure
Supply pressures also increased due to developments in Iraq and Qatar. Iraq, OPEC’s second-largest producer, reportedly reduced output by nearly 1.5 million barrels per day because of storage constraints and limited export options. When storage fills up and exports slow, producers are forced to cut production even if wells can technically keep running.
Qatar, the Gulf’s leading LNG exporter, declared force majeure on gas shipments, with expectations that normal production may not resume for at least a month. That matters because LNG supply is already tight in many regions, and disruptions can quickly raise gas prices and electricity costs. For countries that import LNG, any extended interruption can also shift demand back to oil products, adding more pressure on crude markets.
Hundreds of Tankers Stranded and What Happens Next
With traffic slowed for the fifth consecutive day, some analysis suggests a significant tanker backlog is building. J.P. Morgan analysis cited roughly 329 oil tankers stranded in the Gulf as elevated risks deter movement. Even if production restarts quickly after conditions stabilise, clearing a shipping backlog can take time, keeping prices volatile.
Energy analysts believe many oil fields could resume normal output within days once security conditions improve. However, logistical bottlenecks remain the main obstacle, especially where export infrastructure and storage are constrained, as seen in Iraq and in LNG operations linked to Qatar. For markets, the next key signals will be any reopening of safe maritime corridors, changes in insurance pricing, and evidence that tankers are moving again at normal pace. Until then, oil prices are likely to stay sensitive, with sharp swings driven by every security update from the region.
