LONDON — Oil prices surged on Sunday as traders reacted to Iran’s announcement that it had closed the Strait of Hormuz, a key chokepoint for global energy supplies, despite U.S. assertions that maritime traffic continued.
Iran’s military declared the strategic waterway shut on Saturday in response to alleged violations of a recent U.S.-Iran ceasefire agreement, according to Iranian state media. The move followed reports of renewed Israeli actions in Lebanon, which Tehran described as a breach of the memorandum of understanding signed earlier this month.
Benchmark Brent crude rose sharply in early Asian trading, gaining more than 5% at one point before moderating, market participants said. West Texas Intermediate futures followed a similar pattern. The gains came days after prices had eased on hopes that the interim deal would allow fuller resumption of oil flows through the strait.
The Strait of Hormuz connects the Persian Gulf to the Arabian Sea and has historically carried about one-fifth of global seaborne oil trade. Traffic had begun to recover modestly after the U.S.-Iran agreement, which included provisions for toll-free passage during a 60-day period. U.S. Central Command reported about 55 merchant vessels transited the waterway on Saturday.
“Details on the extent of any actual disruption remain unclear,” a trader with a major European oil company said. Insurance costs for vessels in the region have been volatile throughout the recent conflict, contributing to cautious shipping decisions.
Analysts noted that any sustained closure or heightened risk perception could tighten supplies, given prior months of reduced flows during the broader conflict. The International Energy Agency and other observers have described earlier disruptions as among the largest in oil market history.
U.S. officials continued to dispute the Iranian claim. Vice President JD Vance stated that the strait remained open, according to reports from the weekend. Negotiators from both sides were scheduled to hold talks in Switzerland on Sunday aimed at solidifying the fragile ceasefire.
Energy markets have been highly sensitive to developments in the region since the conflict escalated earlier this year. Prices had previously climbed to multi-year highs amid reduced tanker transits and insurance challenges before easing on signs of de-escalation.
As of Sunday morning, it was not immediately clear how many additional vessels had altered course or delayed transits in response to the latest announcement. Shipping data providers continued to monitor the situation.
The outcome of the Switzerland talks could influence whether the recent memorandum holds and whether oil flows normalize further.
