Iran has just crossed the line. Tehran has announced the closure of the Strait of Hormuz, the waterway through which 20% of the world’s oil passes. The price of a barrel has jumped by $2 in just a few hours—a rise not seen since October 2023. 🛢️
🔍 What’s happening?
Tehran has responded to U.S. strikes with a major escalation. The Islamic Republic is closing the Strait of Hormuz, the strategic chokepoint between the Persian Gulf and the Gulf of Oman. The immediate impact on the markets: oil prices jump by $2.
This is the first time in decades that Iran has followed through on this threat, which it has regularly brandished. Tankers are blocked. Traders are rushing to buy crude before supplies run out.
💡 Why does this matter?
Because 21 million barrels pass through this strait every day. If Tehran keeps up the pressure, European and Asian refineries will be running at reduced capacity within a week. For commodity traders, this is the absolute worst-case scenario.
Oil isn’t the only commodity affected. Natural gas, industrial metals, and even gold will react. European oil companies like TotalEnergies and Shell depend directly on these shipping routes. A prolonged closure would reduce their supply by 15 to 25%.
📊 Our view
In our view, this escalation is only just beginning. Iran knows this is its only real strategic leverage.
We are witnessing a classic supply shock: stable demand, supply plummeting, prices skyrocketing. Historically, every partial closure of the strait has sent the price per barrel up by 10% to 15% in less than 72 hours. This time, geopolitical tensions are even more intense. The United States will retaliate. OPEC+ will not step in to compensate. U.S. strategic reserves are already at their lowest level in 40 years. The result: we’re betting that Brent will test the $90 mark within 10 days if the situation doesn’t resolve itself.
For the FR trader: stay long on oil, short on the euro-dollar, and keep an eye on gold, which will serve as a safe haven. Avoid overly aggressive leveraged positions until Washington has officially responded.
✅ Key takeaway
- Iran closes the Strait of Hormuz following U.S. strikes
- Oil jumps $2 in a matter of hours
- 20% of the world’s oil passes through this strategic waterway
- European refineries face a shortage within 7 days
- Bullish outlook for crude oil and gold in the short term
What do you think? Are you betting on rising oil prices, or are you waiting for the U.S. response before taking a position?
🔎 See also
For more in-depth analysis, check out all our Commodities analyses on ActuTrading Commodities 📈
Source: Investing.com, WTI/Brent market data
