Oil jumps above $91, but the market’s biggest Hormuz fear has changed

Oil prices extended their advance on Tuesday as renewed fighting between the US and Iran revived fears of a prolonged disruption to Gulf energy flows, pushing Brent above $91 a barrel and WTI towards $87.

Brent crude rose about $1.05 to $91.54 in Asian trade, while West Texas Intermediate gained $1.27 to $87.03.

The move followed Monday’s 2%-plus rally after US forces struck Iranian launchers on Larak Island in the Strait of Hormuz and Tehran retaliated against US bases in Jordan.

The latest escalation has shifted attention back from diplomacy to the physical risk around the world’s most important oil chokepoint.

Hormuz is again setting the global oil price

The immediate concern is not simply Iranian production, but whether commercial shipping can move reliably through Hormuz.

Only five commodity vessels were recorded transiting the strait on Monday, according to Kpler data, well below the 10-day average of 14. No liquid tankers were observed in the tracked traffic. Before the conflict, the route handled roughly a fifth of global oil trade.

ANZ Research analysts told The Wall Street Journal that the renewed US-Iran strikes raise the prospect of prolonged supply disruption, particularly because both sides appear to be preparing for a drawn-out confrontation rather than a quick diplomatic settlement.

That backdrop is giving Brent, the global seaborne benchmark, a stronger geopolitical premium than WTI.

It also leaves the market highly sensitive to fresh tanker incidents, mine threats or attacks on Gulf infrastructure.

Supply workarounds are limiting panic

The market is not pricing a complete shutdown.

Saudi Aramco has been offering more crude for loading outside Hormuz, including cargoes headed to China, while regional suppliers increasingly rely on pipelines, ship-to-ship transfers and vessels operating with tracking systems switched off.

ING commodity strategists Warren Patterson and Ewa Manthey have argued that actual oil flows are becoming harder to measure because of dark shipping and shuttle movements.

Their assessment is that the crucial question is whether renewed strikes make shipowners less willing to enter Hormuz, rather than whether official statements describe the route as open.

There are also broader limits on the rally. The latest analyst survey puts the average 2026 Brent forecast at $85.08 and WTI at $80.20, with weak Chinese demand expected to offset part of the Middle East supply risk.

Higher oil is becoming a rates problem too

The renewed crude rally is spilling beyond energy markets.

The US 10-year Treasury yield climbed towards 4.78% on Tuesday, while Japan’s 10-year yield touched 3%, as investors priced renewed inflation risk from higher energy costs.

That creates a feedback loop for oil. Stronger crude prices can reinforce expectations for tighter monetary policy, weakening growth and eventually demand.

But persistent disruption around Hormuz keeps the supply side tight enough to prevent traders from ignoring geopolitical risk.