Oil prices jumped after an Iranian drone struck the Panama-flagged oil tanker MT Kiku in the Strait of Hormuz on Saturday morning, carrying over two million barrels of crude oil. This incident marked the second attack on a commercial vessel in three days, following a drone striking the MV Ever Lovely, a Singapore-flagged cargo ship, on June 25. Brent crude, the international benchmark, initially rose by as much as 4% before easing, indicating market concern over the security of oil transits through the critical waterway.
The attacks occurred despite a two-week-old interim peace deal between the US and Iran, pushing the fragile ceasefire closer to collapse. The US military responded with strikes on Iranian military surveillance infrastructure, communications systems, air defence sites, drone storage facilities, and mine-laying capabilities. Each side has accused the other of violating the agreement, with the US Central Command stating Iran's actions were "in direct response to continued Iranian aggression against commercial shipping."
The International Maritime Organization (IMO) paused its planned evacuation of ships stranded around the Strait of Hormuz after the initial attack, citing safety concerns. Iran's Persian Gulf Strait Authority, which claims the right to regulate shipping in the strait, warned that vessels using routes outside its designated "framework" would not be guaranteed safe passage. This stance contradicts US Secretary of State Marco Rubio's assertion that "no country on Earth has the right to charge for the use of international waterways."
Analysts from consultancy Rystad Energy noted that Gulf storage tanks are 50%-60% full, and if tanker traffic does not pick up, producers may need to reduce output. June Goh, a senior oil market analyst at Sparta in Singapore, highlighted the "fragility of peace in the strait amid the tenuous US-Iran ceasefire" and emphasized the paramount importance of secure passageways to recover lost supply and stabilize the market.
The repeated attacks and retaliatory strikes demonstrate the severe strain on the ceasefire agreement. While the ceasefire is technically still in place, the latest escalation has significantly increased geopolitical risk in the Middle East, directly impacting global oil supply security and prices.
