US Strikes Iran; Brent Nears $92 as Hormuz Traffic Drops

U.S. forces struck Iranian targets as oil prices rose and commercial shipping through the Strait of Hormuz declined sharply.

The clashes extended into a tenth day, with U.S. warplanes and naval destroyers striking Iranian military sites and civilian infrastructure, including bridges and power plants. Iran responded with attacks on energy and civilian facilities in neighboring Persian Gulf states. The confrontations have centered on the Strait of Hormuz, a narrow shipping route for seaborne crude.

Brent crude briefly reached $91.63 per barrel before trading at $91.26 at 5 p.m. EST. U.S. benchmark West Texas Intermediate rose 2.3% to $84.38 per barrel and has gained more than 20% since the hostilities resumed. Traders cited higher premiums for prompt deliveries and concerns about supply shortages.

Maritime traffic through the Strait has been disrupted. Weekly transits fell from 248 vessels for the week ending July 12 to 127 for the week ending July 19, a near 50% decline, according to maritime intelligence. Many operators abandoned the U.S. naval escort corridor and rerouted through the northern passage near Iran. The U.S. military has said the southern corridor remains open, but carriers have avoided parts of the route after attacks on tankers and commercial ships.

Indian state refiners adjusted plans because of the security risks. Indian Oil Corp. and Mangalore Refinery and Petrochemicals suspended crude loadings from Iraq, citing safety concerns. Daily tanker traffic remains well below a pre-conflict benchmark of 125 transits per day, constraining physical flows of Persian Gulf crude.

Goldman Sachs estimates Persian Gulf crude shipments have fallen to below 45% of pre-conflict levels. The firm’s baseline scenario assumes some de-escalation and projects average Brent near $80 per barrel in the fourth quarter. Its research notes that continued navigation restrictions could push Brent above $120 per barrel in the fourth quarter of 2026 and keep Brent around $100 per barrel on average next year.

Analysts say alternative overland pipelines and Red Sea bypass routes lack the capacity to replace lost seaborne flows, reducing available buffers and increasing premiums for prompt cargoes.

Strikes on civilian and energy infrastructure have affected shippers and refiners. Insurance premiums and chartering rates for tankers are rising, and several ship operators are changing routing and schedules to avoid high-risk areas.

The Strait of Hormuz links the Persian Gulf to the Gulf of Oman and the Arabian Sea and carries a large share of global seaborne crude exports. Short-term interruptions in the waterway can quickly tighten physical crude balances because alternatives have limited capacity.