ING strategists Warren Patterson and Ewa Manthey highlight sharply higher Oil prices as US–Iran tensions escalate and vessel traffic through the Strait of Hormuz slows. They note ICE Brent has jumped back above $83/bbl, with risks around attacks, renewed US blockade on Iran, and competing toll proposals from Iran and President Trump adding significant uncertainty for energy markets and shipping costs.

Brent rallies on Hormuz disruption

"Oil prices surged yesterday, with ICE Brent settling 9.6% higher on the day — back above $83/bbl. This strength has continued into early morning trading today, with little sign of easing tensions between the US and Iran."

"The US continues to say that the Strait of Hormuz is open. But given the growing risk of attack, these comments will offer little comfort to ships."

"The other layer of uncertainty for markets is the cost of navigating the Strait of Hormuz. It's well-telegraphed that Iran is insisting on charging a toll."

"But President Trump said that the US will charge a fee equivalent to 20% of a cargo's value for providing safe passage for vessels. There are few details on how this would work—or how serious Trump is about it."

"A 20% fee on a VLCC that carries 2m barrels at $80/bbl, would be equivalent to around $32m or an additional cost of $16/bbl. This is significantly higher than the $1/bbl toll for which Iran has been pushing."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)