Strait of Hormuz disruption fuels oil market volatility

The ongoing conflict between the United States and Iran continues to drive significant volatility in global oil markets. A major factor is the disruption of traffic through the Strait of Hormuz, a critical waterway through which approximately 20 million barrels of crude oil pass daily, representing about a quarter of global demand.

While President Donald Trump has asserted that the United States maintains “total control” over the strait, experts suggest the situation is more complex. A US naval blockade of Iranian ports remains in effect, which has significantly restricted Iranian maritime trade. However, merchant shipping companies remain hesitant to transit the area due to safety concerns following drone and missile attacks on vessels, including those belonging to the Abu Dhabi National Oil Company.

Market activity in the strait has seen a drastic reduction, with daily vessel crossings dropping from roughly 120 to as few as 14. Although Brent oil prices have averaged $94 a barrel since the conflict began, the market remains sensitive to sudden developments regarding the blockade, potential US-Iran strikes, and the ability of Iran to influence the waterway.