Global oil markets faced fresh uncertainty as two major supertankers unexpectedly changed their courses in the Strait of Hormuz following U.S. military strikes on Iranian nuclear installations. The vessels Coswisdom Lake and South Loyalty, each with a capacity of 2 million barrels of crude oil, performed dramatic course alterations over the weekend, according to Bloomberg tracking data.
The situation intensified when Iran’s state media outlet Press TV reported that the Iranian Parliament’s National Security Commission was considering closing the strategic waterway. Major General Kowsari, a senior commission member, indicated that while Parliament favored closure, the final verdict would rest with the Supreme National Security Council.
Analysis from RBC Capital Markets suggests that Iran might opt for targeted disruptions rather than a complete shutdown of the strait. The firm’s experts, with Helima Croft at the helm, point out that Tehran could achieve significant market disruption through selective attacks on individual vessels or crucial infrastructure points like the Fujairah port.
The analysts noted Iran’s apparent strategic restraint thus far, given its existing capability to inflict substantial damage. However, they warned that even limited hostile actions could deter shipping companies from traversing the region, particularly given the current heightened tensions. The threat could expand if Iranian leadership feels existentially threatened, potentially mobilizing allied forces in Iraq and Yemen to target regional energy assets.
Market reaction has been volatile, with Brent crude futures
experiencing a sharp reversal, settling near Friday’s closing levels after dropping approximately 6% from recent peaks. UBS Research emphasized that a full closure of the Strait of Hormuz remains the most severe risk scenario, potentially triggering market disruption exceeding the 2022 Russian supply shock and pushing oil prices beyond $120 per barrel.
Goldman Sachs analyst Giulio Esposito suggested that while a complete closure seems unlikely, Iran might implement partial disruptions in both the Hormuz Strait and Red Sea as part of an asymmetric response strategy. The impact of any such disruption would disproportionately affect Asian economies, including China, India, Japan, South Korea, and Singapore, along with certain European nations. The United States remains relatively insulated from such disruptions due to its domestic shale production capabilities and Strategic Petroleum Reserve.
Multiple financial institutions have published analyses of potential scenarios, with price projections ranging from $120 to $150 per barrel under various escalation scenarios. JPMorgan and Morgan Stanley have outlined different possible outcomes, while market observers remain focused on whether Asian nations would accept any Iranian attempts to restrict maritime traffic through this crucial chokepoint.
The Strait of Hormuz serves as a vital maritime corridor for global oil transportation, and any disruption could significantly impact international energy markets. The current situation has created a complex geopolitical challenge, with stakeholders carefully monitoring Iran’s potential responses to the U.S. military action. Market participants are particularly attentive to signals indicating Tehran’s strategic intentions, while shipping companies adjust their operations to manage evolving risks in the region.
Analysts caution that it may take several days or weeks to fully understand Iran’s intended response, and warn against premature assumptions that the threat has diminished. The situation continues to evolve, with global energy markets remaining sensitive to developments in this strategically crucial region.