Fuel prices in Hungary could rise by this much within days

During last year’s 12-day war, Iran refrained from the most devastating imaginable retaliation: closing the Strait of Hormuz. Some 20 per cent of global oil trade and 30 per cent of LNG passes through here, so such a move would paralyse life in almost every sphere. Yesterday, however, a tanker was attacked, prompting most shipping vessels to halt. Analysts warn of a brutal surge in fuel prices, with diesel particularly at risk.

Strait of Hormuz in peril

Oil prices rocketed brutally in the early hours of this morning, with benchmark Brent crude touching $82 a barrel before correcting above $77 a few hours later – a 13 per cent jump and a 14-month high. The trigger was strikes by the United States and Israel against Iran (the latter also targeting Lebanon’s Hezbollah), a major regional oil producer. Yet the real issue is the peril now facing oil shipments through the Strait of Hormuz.

This narrow passage between Oman, the United Arab Emirates and Iran is one of global trade’s most vulnerable chokepoints, linking the Persian Gulf to the Indian Ocean and the high seas. There are no alternative routes for shipping out the extracted oil and gas to buyers. Stretching 31 miles long and just three miles wide at its narrowest, it lies fully within range of Iranian weaponry. The 20 million barrels of Iranian, Qatari, Kuwaiti, Iraqi, Saudi and Emirati oil that transit daily – worth some $500 billion – account for a fifth of the world’s LNG shipments too. A specialist speaking to Al Jazeera noted that 30 per cent of global oil shipments, 20 per cent of aviation fuel and 16 per cent of diesel and kerosene pass through here.

Oil prices could soar

Asian nations – chiefly China, India, Japan and South Korea – account for 84 per cent of demand (based on 2024 figures). Little wonder, then, that China promptly called for a halt to the fighting after America’s strikes.

Tehran has not yet sealed off the strait, though it has threatened to do so repeatedly. It held back even during last summer’s 12-day war, but yesterday it struck a tanker. The upshot: at least 150 tankers have dropped anchor on either side, with traffic reduced to a fraction. Owners are loath to order departures, fearing tragedy at any moment.

Al Jazeera reports suggest Brent could hit $100 a barrel, sparking a global inflation spike of 0.6 to 0.7 percentage points. Meanwhile, safe-haven gold surged 2.23 per cent ($116) to $5,364 an ounce at dawn, having touched $5,460 earlier.​