Crude prices surged to their highest increase in four years after the Strait of Hormuz was effectively closed due to escalating US-Israeli military operations against Iran. The disruption triggered a systemic supply shock and heightened volatility across global energy markets.
- Oil surged 15%—largest one-day jump since 2022
- Strait of Hormuz effectively closed, disrupting 20 million bpd of crude exports
- CL=F reached $98.40 per barrel
- XLE rose 8.3%, VIX climbed to 37.4
- Global supply chains face disruption; U.S. storage at 92% capacity
- U.S. escort mission failed to secure shipping lanes
Oil futures spiked 15% in early trading, marking the largest one-day gain since 2022, as the Strait of Hormuz—the world’s most critical oil chokepoint—became inaccessible due to intensified military activity. The closure followed the failure of a U.S.-led maritime escort mission aimed at securing commercial shipping lanes, which was undermined by a series of precision strikes on key Iranian naval assets. The disruption has cut off approximately 20 million barrels per day of crude exports from the Gulf region, equivalent to nearly 20% of global supply. The energy market reacted sharply, with the S&P 500 Energy Sector ETF (XLE) rising 8.3% while the VIX index climbed to 37.4, reflecting heightened investor anxiety. The CL=F contract reached $98.40 per barrel, the highest level since mid-2023. Analysts warn of cascading inflationary pressures, particularly in transport and manufacturing sectors, as fuel costs escalate across supply chains. The U.S. Department of Defense confirmed it is reassessing naval deployment strategies in the region, but no immediate alternative route for tanker traffic has been identified. Global refineries in Asia and Europe are already reporting delays in crude deliveries, raising concerns over product shortages. Meanwhile, storage facilities in the U.S. Gulf Coast, including the Sunoco LP Terminal in Crockett, California, are operating at 92% capacity, indicating early signs of supply strain.