Oil hits $78 per barrel as Iran threatens Hormuz shipping

Global oil prices rose above $78 per barrel on Monday after Iran warned that normal shipping through the Strait of Hormuz would not resume unless the United States ends its military presence in the strategic waterway, raising fresh concerns over energy supplies and maritime security in the Gulf.

International benchmark Brent crude climbed above the $78 mark, up 2.5 percent, while US benchmark West Texas Intermediate (WTI) gained 2.37 percent to $73.10 per barrel as traders priced in the possibility of prolonged disruptions to one of the world’s most important oil transit routes.

The latest escalation comes despite earlier market expectations that Washington and Tehran would eventually return to diplomacy following last week’s ceasefire announcement.

However, markets are now confronting the possibility that the Strait of Hormuz could remain partially disrupted for an extended period, keeping a geopolitical risk premium embedded in oil prices.

In a statement cited by Reuters, Iran’s Islamic Revolutionary Guard Corps (IRGC) said restoring normal shipping activity in the Strait of Hormuz depended on an end to American military operations in the region.

“The end of US military interventions in the Strait of Hormuz is the only way in which regular shipping traffic will be restored,” the IRGC said.

The group warned that continued military involvement by Washington could have broader implications for global energy markets.

“Continued interference could lead to greater incidents in the global oil and gas sector,” the IRGC added.

The comments mark one of Tehran’s strongest indications yet that it may use access to the Strait of Hormuz as leverage in its confrontation with the United States.

The Strait remains one of the world’s most strategically important energy chokepoints, handling nearly 20 per cent of global oil consumption as well as significant volumes of liquefied natural gas exports, particularly from Qatar and the United Arab Emirates.

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Although oil prices have risen in response to the latest threats, the gains have remained relatively contained compared with previous Middle East crises, reflecting continued confidence that major producers can offset supply disruptions in the short term.

Analysts said Gulf exporters have accelerated shipments in recent weeks, moving crude from storage tanks onto tankers to minimise exposure to any escalation and ensure supplies reach international buyers.

However, tanker movements through the Strait remain significantly below pre-conflict levels as shipowners and insurers continue to reassess security risks.

The latest developments suggest that the market’s focus is shifting from military strikes themselves to the operational status of the Strait of Hormuz and whether commercial shipping can move safely through the corridor.

Mohammad Baqer Qalibaf, Iranian negotiator and parliament speaker, added to concerns on Sunday after issuing a strongly worded message on social media platform X.

“The era of one-sided deals is over. We told you: keep your word or pay the price. Reality is knocking,” Qalibaf wrote.

The remarks are likely to reinforce concerns that negotiations between Washington and Tehran may become increasingly difficult, potentially prolonging uncertainty in global oil markets.