Iranian forces intercepted a tanker attempting to transit the Strait of Hormuz without coordination on Friday, marking the first known enforcement action since Iran's top military command announced a full closure of the waterway to all vessels. According to Iranian state media, a military source reported that sounds of explosions heard near the coastal town of Sirik were linked to Iranian forces confronting the tanker as it attempted passage through the strait. The tanker subsequently complied with the transit ban after receiving warnings from the Islamic Revolutionary Guard Corps (IRGC) Navy, as per the report. Iranian media had earlier reported explosion sounds near Bandar Abbas, a key port city on the strait, though IRNA later clarified that no explosions had been reported in Bandar Abbas itself, adding that any sounds heard in the area could be related to military activity in maritime zones.
Oil prices experienced significant gains on Thursday, with Brent crude futures rising 2.47% to $95.40 a barrel and US West Texas Intermediate (WTI) crude gaining 2.89% to $92.63, according to The Times of India. US crude futures had earlier advanced by more than $3 during the trading session, with the surge coming after Iran's top joint military command announced the closure of the Strait of Hormuz to oil tankers and commercial vessels. The closure announcement warned that 'any vessel that will attempt passage will be shot at', though the US military on X stated that commercial ships continue to transit in and out of the strait and reported no US warships have been struck after Iran's state media reported U.S. ships near the waterway were targeted by missiles and drones. Oil prices closed up nearly $2 on Wednesday after President Donald Trump said the U.S. is going to attack Iran 'very hard' if no peace deal is finalized, with Brent crude futures last trading 0.3% lower at $94 after settling at $93.10 per barrel, up $1.65 or 1.8%. US crude futures finished at $90.03 a barrel, up $1.83, or 2%, as reported by NDTV Profit.
Iran has completely closed the Strait of Hormuz to all vessels after fresh US attacks, with Iran's military command declaring the strait 'completely closed to all types of vessels' until further notice. According to The Times of India, the Iranian Islamic Revolutionary Guard Corps (IRGC) announced that the strategic waterway would remain shut following new US strikes on Iranian territory. Effective immediately, due to insecurity in the region, the Strait of Hormuz is declared closed to all vessels, including oil tankers and commercial ships, the IRGC stated on its official Telegram channel. Iranian Revolutionary Guards navy reported hitting two ships that attempted to illegally pass through the waterway, with the Guards stating that 'approaching the Strait of Hormuz will be considered cooperation with the enemy'. This closure represents a significant escalation from the 100-day crisis that has already driven global economic shocks, with the International Energy Agency describing it as the 'largest supply disruption in the history of the global oil market'. The development marks a further escalation in tensions after US forces launched additional strikes against multiple targets in Iran, reigniting concerns that the fragile ceasefire agreed earlier this year could collapse.
The enforcement action coincided with competing signals from Washington and Tehran over the fate of an emerging peace deal. US President Donald Trump said on Thursday that the two countries could sign an agreement as early as this weekend that would reopen the strait to shipping, according to NDTV Profit. However, Iran's Foreign Ministry said Tehran had 'not yet reached a final decision' on any agreement, with spokesperson Esmaeil Baghaei reiterating that the country would not compromise on its red lines. The episode underscores the fragile and contradictory state of the US-Iran negotiations, with US diplomats cautiously optimistic about a deal even as Iranian forces continue enforcing the closure on the ground. Trump later claimed the United States controls the Strait of Hormuz, 'not Iran', directly challenging Tehran's closure order, while Iran's IRGC Aerospace Force subsequently carried out coordinated strikes on 18 American military targets across the region.
Beyond geopolitical concerns, tighter US supplies also supported oil prices through significant inventory drawdowns. Data released by the US Energy Information Administration (EIA) showed crude inventories fell by 7.2 million barrels to 426.5 million barrels in the week ended June 5, compared with analysts' expectations in a Reuters poll for a 4 million-barrel draw, as reported by The Times of India. U.S. crude inventories, including those from strategic reserves, have fallen by 79 million barrels since the Iran war began on February 28, as the world's largest producer stepped into fill supply gaps left by the effective closure of the strait. The data showed inventories in the U.S. Strategic Petroleum Reserve at their lowest levels since August 2023, with the US Department of Energy seeking to loan energy companies up to 40 million barrels of crude oil from the Strategic Petroleum Reserve to help push fuel prices down. Prices were also supported by data from the U.S. Energy Information Administration which showed U.S. crude stocks fell sharply last week as refiners scrambled to fill supply gaps caused by the war, according to NDTV Profit. Although some oil cargoes continue to leave the region, overall shipments remain well below pre-conflict levels, contributing to higher energy prices globally and increased concerns about the impact on inflation and economic growth.
The energy crisis is connected to the Middle East conflict, which has effectively closed the Strait of Hormuz, where approximately one-fifth of the world's oil supply passes through. The Strait of Hormuz is one of the world's most critical energy chokepoints, through which roughly a fifth of global oil supplies pass. According to Financial Times reports, approximately 25% of the world's oil supplies passed through the strait before the US and Israel started attacking Iran at the end of February. 34% of global urea trade and 23% of global ammonia trade passed through the Strait of Hormuz in 2024, coming from five major exporters – Iran, Qatar, Saudi Arabia, the UAE and Bahrain. Asia is the region most vulnerable to disruptions, receiving more than half of LNG and seaborne crude oil exports from the critical shipping point. Four Asian countries – China, India, Japan and South Korea – make up 75% and 59%, respectively, of crude oil and LNG exports through the Strait, with Japan and South Korea being particularly vulnerable as most of their energy usage comes from imported fossil fuels. The limited flow of shipping through the Strait of Hormuz could also be capping prices, as some ships transit the strategic waterway, but traffic remains significantly below pre-war levels, with Iran continuing to block most shipping while Washington has imposed its own blockade of Iranian ports.
