On March 5, 2026, crude oil prices surged following Iran's claim that it struck an oil tanker with a missile, as reported by Iranian state media. The British Navy confirmed a large explosion at a tanker anchored in Iraqi territorial waters, noting that the ship's master observed a small vessel fleeing the scene after the explosion. Despite the incident, the crew was reported safe and no fires occurred [1].
U.S. crude oil prices broke above $79 per barrel, with West Texas Intermediate oil rising 6.86% ($5.12) to $79.78 per barrel. The global benchmark Brent increased 4.31% ($3.51) to $84.91 per barrel at 11:30 a.m. ET. Overall, oil prices have surged more than 17% this week [1].
Iran's Revolutionary Guard ordered the closure of the Strait of Hormuz earlier in the week and threatened to attack tankers passing through it. This has led to a standstill in tanker traffic through the strait, as ship owners are concerned about the volatile security situation amid the ongoing U.S.-Israeli war against Iran. The Strait of Hormuz is a critical chokepoint, with about 20% of global oil consumption exported through it [1].
In response to the heightened risk, President Donald Trump announced that the U.S. will provide political risk insurance for tankers passing through the strait and stated that the U.S. Navy would escort ships through the Persian Gulf if necessary. White House press secretary Karoline Leavitt indicated that the timeline for when the Strait of Hormuz will be safe for commercial shipping is actively being calculated by both the Department of War and the Department of Energy, but no specific timeline was provided [1].
CONCLUSION
The missile strike claim and explosion have caused a sharp increase in oil prices, reflecting heightened geopolitical risk and supply concerns. The closure of the Strait of Hormuz and threats to tanker traffic have significant implications for global oil supply, prompting U.S. government intervention. Market sentiment is strongly positive for oil prices, with uncertainty remaining around the timeline for restoring safe passage.