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Just hours after the U.S. launched attacks on Iran’s uranium enrichment facilities, the Iranian parliament expressed support for shutting down the Strait of Hormuz—one of the world’s most critical routes for fossil fuel transportation, particularly oil and LNG. The Middle East conflict, which began on June 13, 2025, following Israeli airstrikes targeting Iranian military bases and commanders, has now entered its tenth day. The situation escalated dramatically with the U.S. joining Israel in directly bombing Iran’s nuclear enrichment sites—a move that had previously been expected to be carried out solely by American military power.
On Monday afternoon, U.S. Eastern time, Iran launched six missiles at U.S. military bases in Qatar, with explosions reported over Doha, according to Axios. In response, Qatar had closed its airspace "until further notice", and the United Arab Emirates (UAE) has also shut its airspace.
Despite the attacks, oil prices are down more than seven percent, with WTI crude falling below $70 per barrel. According to Bloomberg's Javier Blas, the market views Iran’s missile strike as a “perfunctory counterattack”. The Strait of Hormuz remains open and oil is still flowing—including from Iran’s Kharg Island.
The initial impact of the conflict on oil and gas markets remained relatively limited, with Brent crude prices gradually climbing to around USD 79 per barrel—only USD 9 higher than the day before the conflict began. Despite the escalating tensions and President Trump’s two-week warning, prices fell to USD 75 by the end of last week. This contrasts sharply with the early days of Russia’s invasion of Ukraine in 2022, when oil prices surged by about 17%, reaching over USD 110 per barrel in the first week. The modest rise seen in the current conflict was largely due to increased shipping expenses, including higher tanker rates and vessel insurance premiums.
Related: Lammy Warns Iran Against Hormuz Blockade
The market’s trajectory could shift significantly if oil and gas transit routes come under sustained threat, rather than being subjected to temporary or symbolic disruptions. The Strait of Hormuz—situated between Oman and Iran—serves as a vital link between the Persian Gulf, the Gulf of Oman, and the Arabian Sea. It is the world’s most critical oil transit chokepoint, with an average daily flow of 21 million barrels, accounting for roughly 21% of global petroleum liquids consumption and about 25% of world liquids transit.
By Shahriar Sheikhlar for Oilprice.com
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