Oil prices continued to rise on Tuesday after news early in the morning that two oil supertankers had been struck inside the Strait of Hormuz, sending renewed jitters through the market of a renewed flare-up in the Middle East conflict.
Futures on Brent crude (BZ=F), the international benchmark, rose by roughly 2.5% to cross $92.50, a roughly weeklong high. Those on US benchmark WTI crude (CL=F) picked up a strong 2.8% to trade above $88, once again beginning the climb toward $90.
Two oil supertankers — one each owned by Saudi Arabian and South Korean shipping companies — attempting to exit the strait through Tuesday morning were struck by projectiles, a maritime risk consultancy said Tuesday.
No one has yet claimed responsibility for the attacks, but they come after a flare-up over the weekend of US-Iran hostilities, which saw US airstrikes on Iranian rocket launchers answered by attempted strikes inside Jordan and the UAE.
The conflict over the weekend — the first proper return to kinetic action in roughly a month — has renewed worries over the state of the global energy complex, even as oil output from the Persian Gulf has returned to roughly two-thirds of pre-war levels, per Goldman Sachs. Much of that oil is being exported from the region via pipelines to the Red Sea and the Gulf of Oman.
Speaking on Tuesday, US Treasury Secretary Scott Bessent said the Strait of Hormuz would soon be “worthless” on account of current pipeline capacity and plans for future development of increased pipeline routes around the waterway, which, before the war, was responsible for roughly a fifth of the global oil trade.
“That will be bypassed in two years,” Bessent said in a fireside chat at the G20 finance chiefs meeting in Asheville, N.C. “In two years, the Strait of Hormuz will be like a worthless piece of water.”
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