Oil prices jumped sharply on Monday after US President Donald Trump announced the launch of "Operation Freedom" to free vessels blocked in the Strait of Hormuz. The statement heightened geopolitical concerns and pushed prices above the psychological $100-per-barrel mark. Brent futures climbed 6% to $114, while the US benchmark WTI rose 3.17% to $105.2 a barrel. The market reacted immediately, reversing the previous session's losses.
Trump wrote on his social network "Truth Social" that the US is ready to escort ships through "restricted waterways," referring to the Strait of Hormuz. Iran responded immediately, warning that ships must coordinate passage with Tehran for their own safety. Tensions rose after Iranian drones attacked an Adnoc tanker off the UAE coast: fortunately, no one was injured and the vessel was empty. British maritime authorities also reported a new tanker incident, confirming the growing threats to shipping.
Talks between Washington and Tehran have reached a stalemate. ANZ analysts note that the sides have hit their "red lines": the US insists on a nuclear deal, while Iran demands the lifting of restrictions on shipping in the Persian Gulf. These hardened positions make a quick resolution unlikely, leaving the risk of oil supply disruptions at the forefront for traders.
Seven OPEC+ countries agreed to increase production by 188,000 barrels per day in June — the third consecutive rise. However, experts consider this step insufficient given current demand and geopolitical risks. If tensions around the Strait of Hormuz persist or the conflict expands, any small increase in supply will be unable to stabilize the market.
Gold, by contrast, eased slightly: spot prices fell 2% to $4,523 per ounce, and futures dropped 2.3% to $4,533. Investors fear inflation and await further signals from US–Iran negotiations. Analysts warn that if oil stays above $100, central banks will have to keep rates high for longer, which will increase pressure on gold as a non-yielding asset.
Comments on the news
- Why is the Strait of Hormuz so important to the global economy and how can Iran affect shipping there? The Strait of Hormuz is a narrow maritime corridor through which about 20–30% of the world's oil passes (including exports from Saudi Arabia, Iraq, the UAE and Qatar). Iran, controlling the northern shore of the strait and possessing a powerful naval fleet, can block tanker traffic, lay mines or board and inspect vessels. Even the threat of such actions causes a sharp rise in global oil prices, since alternative routes (for example, pipelines through Saudi Arabia) cannot fully replace the strait.
- Why does Iran demand the lifting of restrictions on shipping in the Persian Gulf, and what specific restrictions are being referred to? Iran demands the removal of US and EU sanctions that prohibit foreign companies from insuring, servicing, and calling at Iranian ships' ports. Restrictions also include delays and inspections of Iranian tankers in international waters conducted by the West under the pretext of combating oil smuggling. Tehran considers these measures an illegal blockade violating international maritime law and insists that control over shipping in the region should be exercised only by littoral states without interference from extraregional powers.
- What is Adnoc's role and why is an attack on its tanker off the UAE coast significant for the regional oil market? Adnoc (Abu Dhabi National Oil Company) is the UAE's state oil and gas corporation, which operates the largest oil fields and export terminals. An attack on its tanker (for example, in 2019 off the coast of Fujairah) undermines confidence in regional shipping security, which can lead to higher insurance premiums and transport costs for oil. For the market, this is a signal: if even UAE assets — a traditional US ally — are targeted, risks to all shipments through the Strait of Hormuz increase, driving oil prices up.
Full version: النفط يقفز فوق 114 دولارا وتراجع الذهب مع تصاعد توترات هرمز