Explosion hits Strait of Hormuz as oil markets weigh disruption risk
Diplomatic talks with Iran are on hold and Tehran's claim of "intelligent control" over the waterway has left shipping timelines unclear.
Published
Map: The Gulf and Hormuz, marking Strait of Hormuz
An explosion has occurred in the Strait of Hormuz, a waterway that carries a large share of the world's seaborne oil.
The strait has been under strain in recent days. US Energy Secretary Chris Wright said 18 million barrels of oil moved through the passage on Tuesday, nearly double the earlier daily average of 10 million barrels, and that the seven-day average stood at 11 million barrels a day as of Wednesday. A Saudi pipeline that bypasses the strait remains offline, Wright said, leaving shippers more reliant on the route than usual.
Diplomatic efforts to ease tensions with Iran have stalled. Talks have been postponed, and Tehran has claimed what it calls "intelligent control" over the corridor, a phrase that has left the timeline for safe passage unclear. On Tuesday, Secretary of State Antony Blinken said Gulf states are looking to open their own separate talks with Tehran.
Oil has moved only modestly through the recent run of tensions, with Brent crude gaining in the 1% to 2% range in recent trading rather than spiking. That muted reaction suggests traders had already priced in a significant chance of disruption to the strait, given the pipeline outage and the pattern of militancy in the region. The question now is whether today's explosion changes how long officials and shippers expect any closure or slowdown to last, rather than whether one happens at all.