Oil prices jump as Iran warns Strait of Hormuz ‘cannot be the same’

By Hanna Ziady, CNN

London (CNN) — Oil prices rebounded Tuesday and US gas prices rose as Iran intensified its attacks on energy infrastructure across the Middle East and a senior regime figure suggested that the crucial Strait of Hormuz wouldn’t become safe for ships anytime soon.

Brent crude, the global oil benchmark, rose 3% to trade around $103 a barrel, having jumped more than 4% earlier in the trading session. WTI, the US benchmark, climbed 3.7% to trade around $97 a barrel.

Gasoline prices in the United States continued to march higher, rising 7 cents Tuesday to a nationwide average of $3.79 a gallon – the highest price for a gallon of regular gas since October 2023, according to the American Automobile Association.

In a televised interview Tuesday, Iranian parliamentary speaker Mohammad Baqer Qalibaf said the Strait of Hormuz remained under threat because of the American and Israeli presence in the Gulf region.

“The Strait of Hormuz cannot be the same as before and return to its previous conditions,” Qalibaf said, adding that “there is no longer any security.” He also cautioned that US bombs and jets could not destroy Iran’s weapons facilities.

Iran’s fresh attacks on energy infrastructure have added to worries about global oil and natural gas supply. The United Arab Emirates suspended operations at its Shah natural gas field outside Abu Dhabi following a drone attack Tuesday. A separate drone strike caused a fire at the key Emirati oil port of Fujairah, while an Iraqi oil field also came under attack.

Meanwhile, a tanker was struck by an “unknown projectile” late Monday near Fujairah, the UK Maritime Trade Operations Centre said. The center has recorded more than a dozen attacks on vessels in the Persian Gulf and near the Strait of Hormuz since US-Israeli strikes on Iran began on February 28.

In a further sign of escalation, Israel announced that it had killed Iran’s security chief Ali Larijani on Monday night. Iran has yet to confirm Larijani’s alleged killing.

Prolonged disruption

Tuesday’s jump in oil prices follows a fall in the previous trading session. On Monday, Brent closed 2.8% lower on the day and the S&P 500 had its best daily performance since the start of the war, “as hopes mounted for a resumption of oil flows through the Strait of Hormuz,” said Jim Reid, Deutsche Bank’s head of global macroeconomic research.

Crude oil prices remain about 40% higher than before US-Israeli strikes on Iran prompted Tehran to choke off the Strait of Hormuz, ordinarily a conduit for around a fifth of global oil and liquefied natural gas supply.

US President Donald Trump has called on allies to help reopen the strait, warning that NATO faces a “very bad future” if countries fail to assist. But European leaders remain wary of becoming embroiled in the war.

On Monday, the European Union decided against expanding its naval operations in the Middle East following a meeting of foreign ministers.

“Europe has no interest in an open-ended war,” Kaja Kallas, the EU’s top diplomat, told journalists in Brussels following the meeting. “This is not Europe’s war,” she said, though she added that Europe’s interests are “directly at stake.”

UK Prime Minister Keir Starmer said Monday that Britain was working with allies, including in Europe, on a plan to “restore freedom of navigation in the region as quickly as possible and ease the economic impact,” without providing details. He emphasized, however, that the United Kingdom would “not be drawn into the wider war.”

Also on Monday, the International Energy Agency said its member countries are able to release further emergency oil stocks if needed, on top of the 400 million barrels that will start flowing to global markets this week.

The historic release agreed so far, once completed, will reduce emergency supplies in IEA countries by only about 20%, the agency’s executive director Fatih Birol said in broadcast remarks. “We still have a lot of stocks left, despite this huge release,” he added.

But he also cautioned: “While our stock release can provide a buffer for now, it is not a lasting solution… the single most important thing for a return to stable flows of oil and (natural) gas is a resumption of transit through the Strait of Hormuz.”

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CNN’s Helen Regan, Mitchell McCluskey, Lex Harvey, Christian Edwards and David Goldman contributed reporting.