Iran reported on Wednesday that it had carried out attacks on 10 ships near the Strait of Hormuz in retaliation for the sinking of five Iranian oil tankers by the U.S. This exchange marks the largest series of attacks on shipping by both parties since the onset of the six-month-long conflict. The Islamic Revolutionary Guard Corps (IRGC) of Iran confirmed launching a ballistic missile strike on a U.S. military base near Al Azraq in eastern Jordan. Additionally, they engaged in firing on two U.S. vessels and eight oil tankers trying to traverse a restricted area of the Strait of Hormuz declared by Iran.
The incidents in and around the crucial water passage led to a surge in oil prices, with the international Brent crude benchmark surpassing $100 per barrel for the first time since July. The ongoing conflict has disrupted oil markets, with hopes of a resolution between the U.S. and Iran for safe oil transportation no longer viable. The escalating conflict between Saudi Arabia and the Iran-aligned Houthis in Yemen has added to the uncertainty in energy markets, with recent Houthi attacks causing significant damage to oil installations in Saudi Arabia.
As a result of the turmoil, gas prices have risen sharply in the U.S., with the average price of regular gasoline reaching $4.15 per gallon, a 26% increase from the previous year. Diesel prices also surged to $5.90 per gallon, marking a 59% year-over-year rise. The political ramifications of these price hikes are significant, particularly on the eve of the upcoming midterm elections in the U.S.
Iran has announced the establishment of a restricted maritime zone extending from Chabahar in Iran into parts of the Gulf of Oman and the Arabian Sea. Meanwhile, reports emerged of a drone attack on a tanker carrying Iraqi fuel oil in Iraqi territorial waters, resulting in a fire onboard. The United Kingdom Maritime Trade Operations agency confirmed disabling fire incidents on vessels in the northern Gulf and Gulf of Oman during recent military activities.
The Strait of Hormuz, a vital global oil transit route, has been severely impacted by the conflict, disrupting the flow of oil and other resources. While the U.S. has enforced a military blockade of Iranian ports in response, Iran has threatened oil tankers in Kuwaiti and Bahraini ports. Despite efforts to guide tankers through the strait, the situation remains volatile, with uncertainties surrounding the movement of oil shipments in the region.