The Strait of Hormuz oil disruption is sending Brent crude above $97 per barrel on Monday morning, with London equities expected to fall as US-Iran hostilities continue to escalate and global shipping through the waterway remains badly impaired. The 60-day ceasefire between Washington and Tehran expired last month, and neither side has shown appetite for a fresh diplomatic settlement.
Tanker strikes and a threatened maritime zone
Over the weekend, the US targeted three Iranian oil tankers in retaliation for ballistic missile attacks on US Navy warships. Tehran responded by attacking oil tankers and other vessels linked to the United States, and pledged to introduce a ‘restricted’ maritime zone beyond the Strait of Hormuz in the coming days.
US energy secretary Chris Wright has called on other nations to join Washington in efforts to reopen the strait, saying ‘world trade should not be the sole responsibility of the United States.’ On Friday, President Trump characterised the ongoing exchanges as an ‘intermittent’ military conflict rather than a war. ‘I call it a military conflict because it’s small potatoes for us. It’s not a big thing,’ he said.
That framing sits uneasily with the scale of disruption being recorded at the waterway. Ship traffic data analysed by the Council on Foreign Relations showed a 70% drop in the number of vessels traversing the strait following the launch of what has been described as Operation Epic Fury. Vessels have been hesitant to pass through until safe passage is confirmed.
The Strait of Hormuz oil disruption in historical context
The numbers underlying the commercial anxiety are stark. According to the Congressional Research Service, roughly 25% of the world’s maritime trade in crude oil and petroleum products passed through the strait in 2025, alongside roughly 19% of global liquefied natural gas supplies. The report figure of around 20% for combined oil and gas understates the strait’s importance to crude and refined products specifically.
Rapidan Energy Group, a Washington-based independent energy market firm, has reportedly described the closure as the largest global oil disruption in history, placing it at three times the scale of the 1973 Arab oil embargo. That assessment, cited by the Council on Foreign Relations, gives context to why Brent crude has been climbing steadily and why markets in London are opening cautiously.
The broader knock-on for importers, refiners and energy-intensive businesses is straightforward: sustained disruption to Hormuz transit pushes up the cost of crude for Europe and Asia alike, feeding through to fuel, freight and input costs across a wide range of sectors. UK businesses already dealing with elevated energy costs face a further squeeze if the waterway remains partially closed.
Markets on edge as diplomatic options narrow
FTSE 100 futures pointed lower ahead of Monday’s open, with energy stocks likely to move in the opposite direction as Brent climbs. Traders are watching whether Tehran follows through on its threatened restricted maritime zone, which would further complicate transit for the commercial vessels that have so far continued to attempt passage.
The collapse of the ceasefire has removed the clearest near-term mechanism for de-escalation. With Trump publicly dismissing the conflict’s severity and Iran threatening further restrictions on shipping lanes, the prospect of a swift negotiated reopening of the strait appears limited. Energy secretary Wright’s public appeal for allied nations to share the burden of keeping Hormuz open suggests Washington is aware it cannot sustain the operation alone indefinitely.
For businesses with supply chains dependent on Gulf crude, or on LNG cargoes routed through the strait, the immediate practical question is whether alternative routing, primarily around the Cape of Good Hope, can absorb diverted traffic at tolerable cost. That route adds significant time and expense to voyages, and tanker availability in relevant markets is not unlimited.
The Council on Foreign Relations’ vessel traffic data, showing that 70% fewer ships are currently transiting the strait, indicates the rerouting process is already under way at scale, with consequences for delivery schedules and spot cargo prices that will work their way through supply chains in the weeks ahead.
