Strait of Hormuz Blocked Amid Conflict
Amid the escalating conflict, the Strait of Hormuz has been effectively shut down after 14 cargo ships were hit [https://x.com/i/status/2031977771866398941, https://www.youtube.com/watch?v=51hDHglL-JQ]. Expect energy market volatility.
The attacks have sent Brent crude surging to nearly $120 a barrel. LNG prices in Northeast Asia have also more than doubled. Several ships have been hit by unknown projectiles, including the Thai-flagged Mayuree Naree, which caught fire, and the Japanese-flagged ONE Majesty. Some crew members are reported missing. Maritime traffic through the Strait has drastically decreased, with daily transits falling from 153 to just 13 since the conflict began. Many ships are changing their tracking data to appear linked to China in an attempt to avoid being targeted. The closure is disrupting not only oil and gas but also fertilizer supplies, with potential consequences for food production, especially in countries like India that rely on imports from the region. India has reportedly secured safe passage for its flagged vessels after diplomatic engagement with Iran. Iran has warned that British cargo ships in the Gulf are now considered "legitimate targets". The Iranian Revolutionary Guard stated they would not allow a "single liter of oil" to be shipped to the US, Israel, or their partners.
