Oil prices jumped more than 2% on Tuesday as doubts persisted regarding the effectiveness and readiness of a U.S.-led coalition to protect shipping through the Strait of Hormuz, a critical passage for global oil trade [1]. Brent crude rose 2.45% to $102.57 per barrel, while U.S. West Texas Intermediate climbed 2.51% to $95.85 per barrel as of 8:44 p.m. ET [1]. The surge was driven by escalating tensions and uncertainty about the coalition's formation, with President Donald Trump expressing frustration over some countries' reluctance to participate, stating, "Some are very enthusiastic, and some are less than enthusiastic" [1].
The U.S. Treasury Secretary Scott Bessent announced that Iranian oil tankers were being allowed to pass through the Strait, while The Wall Street Journal reported that the U.S. would soon announce a coalition to escort ships, though Trump indicated the coalition was not yet fully in place [1]. The U.S. has been urging allies to send military forces to protect tanker traffic, but ship movements through the strait have plunged following Iranian attacks, resulting in one of the largest disruptions to global oil supply in history [1].
Warren Patterson, head of commodities strategy at ING, highlighted the difficulty in finding an adequate solution to the supply disruption, noting that proposed insurance guarantees and naval escorts have not materialized [1]. He further cautioned that escorting commercial vessels could leave naval ships vulnerable, suggesting the U.S. may delay such actions until Iran's capacity for attacks is diminished [1].
The Strait of Hormuz, located between Oman and Iran, is a vital artery for the global oil trade, with approximately 13 million barrels per day passing through in 2025, accounting for about 31% of all seaborne crude flows according to energy consulting firm Kpler [1]. Despite the ongoing uncertainty, oil prices were headed for weekly gains as of Friday, even as the U.S. issued a 30-day license for countries to buy Russian oil and petroleum products at sea [1].
CONCLUSION
The ongoing uncertainty and disruption in the Strait of Hormuz have led to a significant spike in oil prices, reflecting heightened market concerns over supply security. With no clear resolution or coalition in place, the market remains volatile, and oil prices are poised for further gains. The situation underscores the critical importance of the strait to global energy flows and the sensitivity of markets to geopolitical risks.