Oil prices surge 3% on tanker attack amid Hormuz supply crisis
Brent breaches $104 as maritime strike heightens concerns over 20% of global oil supply transiting strategic waterway
Oil prices jumped as much as 3.7% on Wednesday after a tanker was struck by a projectile off the United Arab Emirates coast, reigniting fears over global supply disruptions in the Strait of Hormuz.
Brent crude, the international benchmark, rose 2.6% to $103.91 per barrel, while West Texas Intermediate gained to $97.63 per barrel. The latest maritime incident marks the continuation of what has become the most significant disruption to global energy supplies since the 1970s oil crisis, with approximately 20% of the world's daily oil flowing through the strategic chokepoint.
The tanker sustained minor structural damage from an unknown projectile in the Gulf of Oman near the Strait of Hormuz, with no injuries reported among the crew, according to reports. The attack represents the latest escalation in a series of maritime strikes that have seen Iran conduct 21 confirmed attacks on merchant ships since late February.
Oil prices have surged roughly 60% since early February as tensions between the United States, Israel, and Iran have intensified. Brent briefly touched $126 per barrel earlier this month, the highest level in four years, before the recent pullback that Wednesday's rally has partially reversed.
The ongoing crisis has severely disrupted shipping traffic through the strait, with tanker volumes initially dropping by about 70% and major shipping firms suspending operations in the region. More than 150 ships have anchored outside the waterway to avoid risk, while traffic through the critical passage has nearly ceased at various points during the conflict.
Energy producers are reaping the benefits of elevated oil prices. Chevron has gained 29.2% year-to-date, closing at $196.84 on Tuesday, according to market data. ConocoPhillips has risen 22.1% over the past year, trading at $121.32, while Occidental Petroleum has surged 40.7% in 2026, with shares at $58.14 last week.
The risk premium embedded in oil prices reflects growing concerns that the crisis could protract further, potentially requiring strategic petroleum reserve releases or alternative supply routes. However, analysts note that with global inventories relatively low and spare production capacity limited, any prolonged disruption could push prices significantly higher from current levels.
Market participants are closely monitoring diplomatic efforts to de-escalate the situation, even as shipping insurance premiums for the region have soared and vessel owners weigh the commercial viability of continued transit through the world's most important oil transit chokepoint.