Oil Jumps Again as Tankers Burn Near Hormuz

14 Ships Hit, Oil Spikes, The Strait Is the Story

The US and Israel have now been conducting military strikes against Iran for two weeks in what is being described as the biggest military operation since 2003.

The conflict is severely disrupting global energy markets. The International Energy Agency has authorised its largest ever emergency oil release of 400 million barrels to help contain rising prices. Shipping conditions have also deteriorated sharply, with at least 14 ships struck in the Strait of Hormuz, including the Thai-flagged cargo vessel Mayuree Naree. A ship near an Iraqi port was initially reported as Australian-flagged, although DFAT has since indicated that early information was likely incorrect.

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Oil’s War Premium Returns

The human cost is also escalating. The New York Times reported that a primary school was hit in a US strike, killing at least 175 people, most of them children. At the same time, Trump has continued projecting confidence, saying the war is being executed as well as anyone has ever seen and arguing that Iran is close to the end of its line. He has described Iran as having little effective navy or air force left and said he does not believe Iran is laying mines in the Strait of Hormuz.

The more important point is that there appears to be a gap between the public messaging and the intelligence picture. While Trump is presenting the conflict as moving decisively in the US and Israel’s favour, intelligence assessments appear far more cautious. Reports suggest Iran’s leadership remains largely intact, still maintains domestic control, and is not close to collapse.

For us, that is the real issue. The public narrative is pointing toward a conflict nearing its end, but the intelligence picture suggests ending the war on acceptable terms could still be far more difficult if Iran’s hardline leadership remains in place.

Trump Says “Nearly Over”, Markets Say “Not Yet”

Crude oil pushed to session highs after reports that a fire broke out on an oil tanker in the Persian Gulf near Basra, within Iraq’s territorial waters, following an apparent attack. A second tanker anchored off the coast of Kuwait was also reported to have suffered an explosion.

Earlier in the day, at least three cargo ships were hit near the Strait of Hormuz, taking the total number of vessels struck in the region since the Iran conflict began to at least 14.

In after-hours trade, front-month NYMEX crude for April delivery jumped 7.5% to US$93.83 per barrel after closing the regular session up 4.6% at US$87.25. Brent crude for May delivery closed up 4.8% at US$91.98 per barrel.