Crude prices pushed higher for the second time in a week on Monday after Iran's Revolutionary Guard declared the Strait of Hormuz closed and struck a container ship trying to slip through it.
WTI traded at $73.78 a barrel, up 3.21% on the day. Brent crude rose 3.13% to $78.47. Both benchmarks have now bounced well off the three-month lows they hit in late June, when a short-lived ceasefire and a reopened strait sent crude tumbling.
A ship hit, then a shutdown
The spark came over the weekend. Iranian naval forces said they fired warning shots at a tanker that strayed onto an unapproved route, then hit the Cyprus-flagged container ship GFS Galaxy. Its crew scrambled off the burning vessel and one sailor is still unaccounted for. Tehran soon said the waterway would stay closed indefinitely.
Washington answered with another wave of strikes, this time aimed at Iranian air-defense sites, missile launchers and patrol boats dotted along the southern coast. It was the sharpest exchange since the truce fell apart last week, when Trump pronounced the June ceasefire dead and revoked Tehran's license to sell oil.
Traffic has all but stopped
Shipping data tells the rest. Only a handful of large tankers have crossed Hormuz this week while broadcasting their location, down from dozens a day before the flare-up and roughly 130 a day before the war began in February. On a normal day close to 20 million barrels of oil move through the channel, about a fifth of the world's seaborne supply, so a blockage there ripples through every market at once.
Traders are paying up again for the risk that Gulf barrels never reach the buyers waiting on them.
OPEC+ can't plug the hole
The extra oil promised by OPEC+ is doing little to cool the market. Seven members agreed on July 5 to lift their August production ceiling by another 188,000 barrels a day, the fourth such bump since the strait first closed. The catch is where those barrels sit: most load inside the Gulf, trapped behind the very chokepoint that is pushing prices up.
Natural gas broke from the pack, easing about 1% to $2.91 per million British thermal units as full US storage outweighed the Gulf drama.
What comes next
Oman is trying to build an exit. Muscat has floated a plan to split Hormuz into two separately managed lanes, giving commercial ships a path that keeps them clear of contested water. Whether Iran signs on, and whether insurers trust a truce enough to cover cargoes again, will decide how far this rally can run.
For now the market is trading the headlines, and every headline points the same direction.