Crude oil prices surge as shipping through Strait of Hormuz declines

Global crude oil prices rose sharply this week amid escalating tensions between the US and Iran and growing risks to Middle Eastern supplies. Brent crude is trading near $95 per barrel, while WTI crude remains above $90 per barrel. Both benchmarks are heading for their strongest weekly gains since mid-summer.

One of the main factors is the situation in the Strait of Hormuz, a key route for global energy trade. Only four commodity vessels passed through the strait on Thursday, down from nine a day earlier and well below the 10-day average of around 15.

Before the conflict began, around 125 large commercial vessels passed through the Strait of Hormuz each day, including oil tankers, LNG carriers, bulk carriers and container ships. The route handled around one-fifth of global crude oil and LNG supplies, meaning prolonged disruption to shipping poses risks to global energy and transportation markets.

As supply risks increase, analysts are revising their crude oil price forecasts higher. ANZ expects Brent crude at around $95 per barrel in the short term and sees further upside if the Middle East conflict intensifies.

Higher crude oil prices increase the risk of rising fuel, transportation and ocean freight costs, which could also affect agricultural logistics. Additional pressure is coming from disruptions to energy supplies, with US diesel prices already reaching record highs amid Middle East risks and attacks on Russian refineries.