Oil prices surge 13% as Iran halts trade through Strait of Hormuz

Oil prices surged in early trading following the commencement of US and Israeli military operations against Iran. On the ICE exchange in London, Brent crude oil for May delivery climbed 13.04% on Monday, March 2, reaching $82.37 per barrel.

Brent crude last traded above $82 on January 16, 2025, marking the first time in over a year. Following the initial sharp rally, prices pulled back to $79.38.

Iran halts trade via Strait of Hormuz

On March 1, Iran announced it had suspended all trade through the Strait of Hormuz until further notice, citing it as a direct response to attacks on its territory.

Approximately 20% of the world’s oil supply and up to 30% of liquefied natural gas (LNG) shipments pass through this strategic waterway.

Tehran’s decision has resulted in a congestion of vessels near the strait. According to Reuters data, at least 150 oil tankers have anchored in open waters, unable to transit the passage.

Analysts warn of supply shortfall

Anna Butenko, an analyst at the data firm Pervaya, noted that despite current surpluses in the global market, a complete cessation of transit through the Strait of Hormuz could trigger a temporary supply shortfall of approximately 10 million barrels per day—equivalent to 10% of global consumption.

Meanwhile, Middle Eastern leaders have warned Washington that the conflict with Iran could push oil prices above $100 per barrel.

US President Donald Trump projects that the military operation against Tehran may last four weeks. Simultaneously, Trump indicated that Iran’s new leadership has extended an offer to negotiate with the US.

“They want to talk, and I have accepted. I will speak with them,” Trump said. “They should have done this sooner. They should have presented a proposal that could have been very practical and easy earlier. They waited too long.”