Brent Climbs Above $83 as Hormuz Risks Shake Oil Markets

Key Moments

Hormuz Tensions Ignite Oil Price Spike

ING strategists Warren Patterson and Ewa Manthey reported that oil prices have moved sharply higher as geopolitical frictions between the United States and Iran escalated and ship movements through the Strait of Hormuz slowed. They pointed out that ICE Brent futures have climbed back above $83/bbl, with the market increasingly focused on the risk of attacks, the possibility of a renewed US blockade on Iran, and heightened uncertainty over shipping costs through the key chokepoint.

According to their assessment, these overlapping risks are injecting substantial volatility into energy markets and complicating cost calculations for vessels transiting the strategically important waterway.

Brent Futures React to Escalating Risk

The strategists highlighted that the latest move in prices has been abrupt. As they noted,

“Oil prices surged yesterday, with ICE Brent settling 9.6% higher on the day — back above $83/bbl. This strength has continued into early morning trading today, with little sign of easing tensions between the US and Iran.”

They also observed that official assurances have done little to reassure market participants and shipping operators. As they stated,

“The US continues to say that the Strait of Hormuz is open. But given the growing risk of attack, these comments will offer little comfort to ships.”

Competing Toll Proposals Add Cost Uncertainty

Beyond the immediate security concerns, Patterson and Manthey emphasized that the cost of navigating the Strait of Hormuz has become another critical source of uncertainty for market participants.

“The other layer of uncertainty for markets is the cost of navigating the Strait of Hormuz. It’s well-telegraphed that Iran is insisting on charging a toll.”

At the same time, they highlighted that the United States has floated a competing and far more expensive framework:

“But President Trump said that the US will charge a fee equivalent to 20% of a cargo’s value for providing safe passage for vessels. There are few details on how this would work—or how serious Trump is about it.”

Potential Cost Impact for Crude Shipments

The ING strategists illustrated the scale of the potential cost shock with a specific example involving a very large crude carrier (VLCC). They wrote,

“A 20% fee on a VLCC that carries 2 million barrels at $80/bbl, would be equivalent to around $32 million or an additional cost of $16/bbl. This is significantly higher than the $1/bbl toll for which Iran has been pushing.”

The comparison underscores how dramatically different toll structures could affect shipping economics and, by extension, global oil pricing if either proposal were implemented.

Illustrative Cost Comparison

The wide gap between these hypothetical toll structures highlights why traders and shipowners are closely monitoring policy signals from both Washington and Tehran as they reassess risk and pricing around Strait of Hormuz transits.