Strait of Hormuz Tensions Fuel Oil Price Surge Amid Global Supply Concerns

Tensions in the Strait of Hormuz have escalated, causing a 5% hike in oil prices as attacks on ships amplify supply fears. Analysts argue that the International Energy Agency's proposal to release a record 400 million barrels of oil reserves is inadequate to ease these concerns.

The Brent futures rose by $4.18, closing at $91.98 a barrel, while the U.S. West Texas Intermediate saw an increase of $3.80, settling at $87.25 a barrel. At least 14 vessels have been struck, leading to a near standstill in the strait, which is crucial for about a fifth of the global oil supply.

Despite President Donald Trump's assurance of escorting tankers, the U.S. Navy has declined industry requests for military escorts, citing high risks. Meanwhile, the IEA considers releasing reserves twice the volume discharged after Russia's Ukraine invasion, but experts doubt its efficacy given the ongoing Middle East conflict.