According to NBC News, U.S. crude surged more than 3% to above $70 a barrel and Brent crude climbed past $74 after multiple vessels were struck in and near the Strait of Hormuz. A U.S. official attributed the strikes to Iran's Revolutionary Guard, with missiles hitting two ships and at least one drone striking a third commercial vessel.
The Strait of Hormuz is where oil risk reprices instantly. Even without a full supply disruption, attacks on tankers raise the odds of higher shipping costs, pricier insurance premiums, and a fresh inflation headache for central banks and consumers who were starting to enjoy cheaper energy. One-third of global seaborne oil passes through this waterway.
Markets had gotten comfortable treating Middle East tension as background noise. That trade looks lazy again. Oil at $70 is not a crisis by itself, but Tuesday's move sends a clear signal: traders are putting a security premium back into crude, and if attacks on shipping continue, gasoline prices and inflation expectations will move before diplomats do.
Filed to the Markets desk · Jul 7