Oil rises on US-Iran friction over Hormuz

• US seizes Iranian cargo ship
• Iran says it will respond to ‘armed piracy’
• Brent and WTI up more than 5%

Oil prices rose more than 5 percent in early Monday trade after the US seized an Iranian cargo ship that allegedly attempted to break Washington’s blockade of the Strait of Hormuz and Tehran warned of retaliation.

Brent crude futures gained $5.08, or 5.62 percent, to $95.46 a barrel by 04:18 GMT and West Texas Intermediate was at $88.86, up $5.01, or 5.97 percent. Oil had lost more than 9 percent on Friday after Iran said it would reopen the strait, through which one-fifth of global crude normally flows.

Traffic through the chokepoint has been at a near standstill since the US and Israel first launched attacks on Iran on February 28.

In a post on X, Sultan Al Jaber, CEO of the Abu Dhabi National Oil Company (Adnoc), said almost 600 million barrels of oil had been blocked so far. 

“The strait cannot operate under threat… Hormuz belongs to the world. It must be returned to the world. Exactly as it was,” he said.

Saul Kavonic, MST Marquee’s head of research, told Reuters that oil markets continue to gyrate in response to oscillating social media posts by the US and Iran, rather than the realities on the ground. 

Shipowners will be shy about heading towards the strait again without receiving much more confidence that any announced passage is real, he said.

In a post on Truth Social, US President Donald Trump said the US Navy had taken custody of an Iranian-flagged cargo ship named Touska for breaching the US blockade, which began on Monday last week.

“The Touska is under US Treasury sanctions because of its prior history of illegal activity. We have full custody of the ship, and are seeing what’s on board!” he said.

The Tehran government initially denied the news, but later said in a statement: “We warn that the armed forces of the Islamic Republic of Iran will soon respond to and retaliate against this armed piracy by the US military.”

Iranian armed forces on Sunday forced two oil tankers flying the flags of Botswana and Angola to retreat after attempting unauthorised transit through the strait, Iran’s semi-official Tasnim news agency said.

More than 20 vessels passed the strait on Saturday, Reuters reported, quoting data from shipping analytics firm Kpler.

Gold prices were down 1.3 percent at $4,794 per ounce early on Monday, after hitting their lowest since April 13 earlier in the session.  

On Sunday, Saudi Arabia’s benchmark stock index fell 0.8 percent, with oil giant Aramco slipping more than 1 percent.   

The Dubai and Abu Dhabi stock exchanges will open for trading on Monday. 

Further reading:

• Call it what it is: the War of Hormuz
• Why Hormuz is no Suez or Panama
• Tanker flows shift away from Hormuz to the Atlantic