Oil Markets Brace for Hormuz Shock as Iran-US Tensions Escalate

Oil markets are bracing for a potential supply shock after U.S. strikes on Iran raised the risk that flows through the Strait of Hormuz—through which about 13 million barrels per day (roughly 31% of seaborne oil) moved in 2025—could be disrupted. Analysts expect an initial knee-jerk price reaction when trading resumes, but the bigger question is whether tensions could trigger a sustained interruption of Gulf exports. Scenarios range from limited Iranian exports being halted to a full blockage of Hormuz; a closure could push oil into triple digits and LNG prices to record highs, depending on duration. Some experts warn the disruption could be three times the severity of the 1970s shocks, while the U.S. and allies would likely deploy escorts to protect shipping lanes. Lipow estimates a roughly 33% probability for a closure-like scenario, and Kavonic warns a full Hormuz disruption could be catastrophic for markets. Current price context cited: Brent around $72.5 and WTI around $62.0.}