Fears of a potential oil shock rattled global markets Monday after Iran’s parliament backed a proposal to close the Strait of Hormuz — a critical energy chokepoint. Brent crude briefly spiked 5.7%, hitting $81.40 per barrel, before settling around $77.20 later in the day.
The Strait of Hormuz, a narrow 33-kilometre passage, handles a massive share of the world’s oil exports from countries like Saudi Arabia, UAE, Kuwait, and Iran. Any disruption here could send shockwaves through the global economy.
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Though the final decision lies with Iran’s Supreme National Security Council, the move signals rising tensions after recent U.S. and Israeli strikes. Experts warn that if Iran follows through, oil prices could skyrocket.
Goldman Sachs analysts estimate Brent crude could surge beyond $110 per barrel if the strait is blocked, intensifying energy inflation worldwide. As the geopolitical situation evolves, energy traders are bracing for further price swings.
