Iran strikes 2 ships, pushing oil over $114 a barrel

Iran attacked two Israeli-linked container ships and UAE port facilities over the weekend, pushing Brent crude futures 1.72% higher to $110.91 a barrel as the conflict throttles traffic through the vital Strait of Hormuz.

"With the conflict now expected to last at least into deep April, the barrel math becomes increasingly grim," said Ryan McKay, senior commodity strategist at TD Securities, in a Thursday note to clients.

The attacks, part of what Iran’s Revolutionary Guard Corps calls “Operation Wave 97,” included a confirmed missile strike that destroyed one Israeli container ship on April 7 and a separate drone strike on the Liberia-flagged MSC Ishyka. In the UAE, missile debris sparked a fire at the Khor Fakkan port, injuring four workers. U.S. crude futures jumped 2.35% to $114.16 a barrel on the news.

The escalation effectively shutters the world’s most important energy chokepoint, which handles about 20% of global oil supply. The closure has already triggered the largest supply disruption in history, with analysts estimating nearly 1 billion barrels will be lost by the end of the month if the strait remains closed.

The Iranian campaign has broadened from targeting vessels at sea to direct strikes on port infrastructure. The UAE’s official media confirmed a fire at Khor Fakkan on the country's eastern coast, stating it was caused by debris from a missile intercept. The incident injured three Pakistani nationals and one from Nepal.

Iran’s IRGC claimed responsibility for hitting an “Israeli ship” with a cruise missile near Jebel Ali, identifying the vessel as the “King Dao Star.” Martin Kelly, Head of Advisory at EOS Risk Group, identified the likely vessel as the 4,253 TEU Qingdao Star, a ship formerly operated by Israel's Zim Integrated Shipping Services.

The attacks are the latest in a conflict that has seen Iran launch over 500 ballistic missiles and more than 2,100 drones toward the UAE, according to officials in the Gulf nation.

Global Supply Chains Under Pressure

The disruption is creating significant consequences for global energy markets and supply chains far beyond the Gulf. President Donald Trump issued a stark warning to Tehran on social media, giving a Tuesday deadline to reopen the Strait of Hormuz or face attacks on the country's power plants and bridges.

The effective blockade is forcing nations to take extraordinary measures. European airports have begun restricting jet fuel, with Ryanair’s CEO predicting summer flight cancellations of 5 to 10 percent. In Bangladesh, fuel shortages have led to robberies at gas stations, while governments in Australia and South Korea are urging citizens to use public transport to conserve fuel. The Philippines has declared a national emergency, encouraging carpooling and a four-day workweek for some government offices to reduce fuel consumption.

The Strait of Hormuz has been a strategic chokepoint for millennia, but its modern importance is tied to the discovery of oil in the 20th century. Any prolonged disruption threatens to drive up fuel prices, destabilize supply chains, and impact global food security, as Gulf states are also major exporters of fertilizers.

This article is for informational purposes only and does not constitute investment advice.